I was six days shy of my 21st birthday when we signed the closing paperwork for our home. The past six months of the year had been filled with so many ups and downs when it came to this home-buying process, that the relief I felt when signing that paperwork was almost unreal. What we had been dreaming for and striving so hard to achieve was finally happening! Read on to see how we turned this dream into a reality.
How I Did It
First of all, I want to say that I really believe that anyone my age can buy a house. If you have help like I did, it will be so much easier, but it is still possible for anyone who puts in the hard work and dedication.
The first very important thing when buying a home is credit. I started building my credit as soon as I possibly could. I was fortunate enough to have parents who let me be an authorized user on their credit cards (only for gas and groceries!) when I was 17. This really helped me establish my credit in the beginning, but it did hurt my score later down the road. My parents put their business expenses on the card, so it was showing my debt to income ratio was outrageously high (part-time fast food salary right here.) So while being on their credit cards did help me build payment history, I asked to be removed from them when I realized how the high balances were affecting my credit score.
I also got my first car at 17 (which I still drive today!) and that has helped my credit score bunches too. I cosigned for it with my dad because I doubt I would have been approved on my own (can you tell I have pretty great parents yet?)
I continued to build my credit by opening a few store credit cards, getting a personal loan for a semester of school, etc. To this day I have never had a late payment so that really helps! Let me pause here and say that it is entirely possible to buy a home without relying on a credit score. That is another post altogether, but for those who think I am advocating for debt here, just know that this is how my story began, before I was introduced to alternate ways of thinking about money other than the American way of financing everything.
The second important thing is going to be your job history. I never would have imagined when I took a part-time teller position at the bank, that I would still be working there almost three years later making quite a bit more than when I started. I switched branches and went full-time, got a few promotions and raises to go along with them, and almost three years later I was still with the company. This looks fantastic on any type of loan application. Sure, would 15 years look better? Obviously that is just not feasible for my situation. Plus, many loan apps just ask for your most recent two year job history, so me having the same job that whole time looked really good. This is not to discourage you if you have switched around a few jobs. If your resume clearly shows that your jobs are improving each step of the way, that’s a plus for you. Or, if you have switched jobs but they’re in the same industry, and you have no big employment gaps, that’s usually fine too. We all have to start somewhere, and the good lenders out there will understand that.
These are pretty much the top two things creditors are going to look at when deciding to give someone a mortgage or not. It really is as simple as that. Yes, many more factors go into play, and I am by no means a mortgage expert, but how much money you make and how likely you are to pay your loan back, are going to be the bank’s main concerns.
Technically, we began house hunting before we were pre-approved for a mortgage loan. Our initial plan of buying a mobile home to save money and pay it off in three years was foiled like most plans are, but the real estate agent who was helping us buy the land for the mobile home kept in touch. So when we got it in our head to switch gears and search for a “normal” house, I reached out to that same real estate agent to see if he could help us. Of course he was more than willing! I spent a lot of time on the internet, looking at probably thousands of pictures of potential homes. With so many possibilities out there, how could we possibly choose? This is where a good real estate agent really comes into play. And the best part about that agent is when you’re on the buying end of the sale, his or her services to you are completely free! The buyer’s agent gets paid from the selling agent’s commission, so the buyer doesn’t pay a dime. It is plain silly to not take advantage of a real estate agent when you’re buying a home. You are literally leaving money on the table that you could be getting from an expert’s knowledge of market conditions and negotiating skills. Also in our case, our real estate agent was able to recommend to us our mortgage lender. Our lender was so helpful, I was able to get pre-approved for the mortgage within less than an hour of filling out the online application. He was always able to be reached by phone call or even text message, so any of my questions were answered during the whole process. I was very grateful our real estate agent recommended him to us, or else we would have never even heard of him since he wasn’t one of the local banks. Before we began this process, I didn’t even know there were lenders out there who only did mortgages. It’s amazing how much we have learned along the way!
After viewing a few homes with our real estate agent, my husband and I found The One. The location was perfect–walking distance from the lake and park, the home so very spacious with three bedrooms, two baths, and two living areas, a beautiful outdoor patio with a shed in the back, and to top it all off, and in-ground swimming pool. We placed an offer, and after a few rounds of negotiations between the agents, we were soon to be first-time homeowners. After the nitty-gritty details of inspections, appraisals, banking records, and plain ol’ patience, there we were, signing the paperwork and being handed the keys to our very own home.
What I Learned
One of the things I had been praying for in my life was patience, and I certainly got the chance to build that virtue during the home-buying process. One of the things many people might not realize is how long it can take to purchase a home. In my case it was about a six month process from the initial time we set out to start looking. I’ve learned that your first plan may not always work like you wanted it to, but to stick it out for something even better.
I also learned that we may have been a bit better off if we had been more prepared. I was very good with having all of our documents and paperwork ready, but I couldn’t have foreseen other things such as the layoff that came within the first year of home ownership, and the result of living on a much smaller income. If we had waited a little while to buy a house, we could have grown our emergency fund better and been more prepared for a hit like this.
Property taxes is another thing I learned about. I knew that they existed and that we would have to pay them, but I didn’t know that they could be so high! This resulted in us getting a mortgage payment that was a bit higher than we wanted to max out at. We wanted the house so bad though that we ignored it since we could technically afford it. Now that we have settled in to the house and emotions have settled down, we sometimes wish we would have found a different location where property taxes weren’t so high.
Nonetheless, I am so pleased with the decision to become homeowners, and we absolutely love our house. It will be a place we can look back on with so many memories as the years come.
Putting it all Together
Never in my life could I have dreamed of owning my own home at 20 years old. I had always daydreamed about having my own apartment, but a house was a whole different story. Funny how not even two years into renting and I couldn’t stand it. I hated the lack of space and the inability to customize my living space the way I wanted. I think that my husband and I were going a bit crazy being packed into a one room apartment after growing up in the country our whole lives.
With the help of many supporting people, a good credit score, and good job history, I was able to make the American dream of being a home-owner a reality much sooner than many people my age. It is my firm belief that anyone my age can become a homeowner if they are willing to put in the effort. For as much work as it is though, it is an experience that you will look back on and relish. My husband and I have both said that we loved the house-hunting process, and I still catch myself looking at homes for sale online just for the fun of it! I love my home and have no intentions of moving out anytime soon; I think that is just the dreamer in all of us coming out.
What about you? Have you every purchased a home, or are you in the process of finding your dream home now? Do you have any questions about the home-buying process? Share your experience in the comments. If you enjoyed this article, share it with your friends!