The day I drove my car off the lot, I promised myself I’ll buy a house the following year. I started thinking of ways I can save money in time. At the time I was living in a less than desirable situation, a room share with two other people who did not like each other (ugh the stupid petty drama). But the place had pluses too. For starters, it was easily accessible by bus/metro. Most of all, it was $300 flat, like everything included. I figured I can endure this situation for a little bit longer. I also made a conscious decision to stop spending so much on food. Eating out is absurdly expensive. I was going to cook at least all my meals on weekdays. I also shopped less and took the bus/metro to work to avoid paying $200 plus a month for parking. Once I was done downsizing, I was left with two bills and a significant amount of unallocated funds. Then, the best news!! I got called up by a recruiter for a position one level up from my current one at a different company. I was starting to get fed up of all the things that were going on at my job (more on this later) so I agreed to undergo the interview process. I got the job and the pay raise that comes with it. I also got the annual leave I did not take in the form of a check :). In November 2014 I started my new job and decided to start saving seriously. I technically had to start from zero at this point because by this time I had also accrued some credit card debt (kinda went crazy around christmas) and paid it off with what I had saved so far. I am a woman with many flaws and a shopping habit that needs to be fixed for good. I would not eat good food but I can’t pass up a good shoe sale smh.
So I went back to my old saving habits. The condo fund was established. My main contribution occurred in January, February and March, I also put my tax return towards that. In February I started searching for lenders and got in touch with loan officers. I also researched some first time homebuyer programs but found out that while I do qualify for them, I would miss out on properties because the closing process for those programs takes twice as long as a regular process (30 vs. 60 days). No seller is willing to wait that long in this market. I also looked at some local programs that had down payment assistance. But the neighborhoods that they were allocated for were either too expensive or too inconvenient for me. Finally I decided to just get a conventional loan and see what first time homebuyer perks they were willing to offer me. At this point my credit score was in the upper 700s so I was pretty confident that they’ll accommodate me. And I was right.
The Home Buying Process
A few things I learned searching for and buying a home.
- Buying a home is not an impossible task. If you put your mind to it, you can do it. The only thing you have to be sure about is whether you want to be a homeowner or not.
- It doesn’t matter if its the sale of a lifetime, if you really want to buy a home, do not make a big purchase for the three months before you put an offer. Just don’t.
- The process might be an exercise in patience.
- Search within your means. There’s nothing more heartbreaking than finding out you can’t afford the home you’ve been lusting after.
- Make sure that the total monthly payments, Mortgage + HOA or Condo fee is no more than 30% of your income
- Shop around for the best deal. Talk to at least 5 lenders. They don’t all have to pull your credit score so your score won’t go down. If you pulled your credit score recently (Like within a month), you should give them that so they can base their offer on it.
- Take home ownership seminars. Some of them may qualify you for your state’s down payment assistance
- Search for state programs that might allow you to apply for closing cost or down payment assistance based on your income. Make sure you check out the income ranges/requirements before you rule this option out. Sometimes, you might still be within the income range for certain programs depending on your marital status, location etc.
- Don’t be afraid to ask the seller for stuff, like replacing the HVAC unit, the worst he/she will say is no.