It’s hard to believe sometimes that I’m already on my 3rd home since I purchased my first one at the age of 22! Looking back, I can’t believe I was that responsible at 22 but I was so determined to build something for myself at an early age and I’m so happy I did.
I’ll be honest, my first two were never going to be a “forever home” but they both hold such a special place in my heart because they were just such big stepping stones in my life and I’ll never forget the hard work I put into making it happen. Ultimately, my first condo helped me get my second and my second helped me get my current home that I am absolutely in love with. It feels good to work for something slowly and see your dreams become a reality.
With that being said, a lot of the time I get asked how I bought a house at such a young age and if I had any tips/tricks when it came to home buying and well,.. boy do I! Here are a bunch of my tips for buying a house and what I’ve learned along the way.
SAVE. SAVE. SAVE.
I know, I know, saving isn’t necessarily the most fun and it comes with sacrificing those favorite pair of shoes you’ve been eying or a vacation with friends but sacrifices make for the greatest rewards. I was never a big “partier” so I never went out a lot or spend a ton on food/drinks/ubers etc.. I know it doesn’t seem like much but think about every few days eating out, every weekend going out, that morning starbucks coffee — it all adds up. I have always been more of a cook at home kinda gal, stay in and enjoy my home which is prob why I’ve always been OK with saving my extra money. With that being said, I always set aside a budget for spending throughout the month and it’s the best way to stay sane and happy. Another thing —
Carrying a lot of debt makes it more difficult to save for a house, since a chunk of your income goes toward repayments. That debt load can also make it more difficult to qualify for a mortgage. If you have debt, do whatever you can to reduce it. If you have student loans with high interest rates, consider refinancing them to lower your payments. If you have high-interest credit card debt, pay off as much as you can and consider transferring your balance to a low-interest card. I didn’t even start looking for a home until I had paid off ALL my credit card debt completely and I now don’t ever rack up a CC bill.
DO THE MATH.
This is a biggie. Before you jump on the real estate sites and start looking at houses, take a detailed look at your finances. Use your bank statements to help you figure out how much you’re spending each month so that you can get a realistic picture of what kind of mortgage payment you can afford. Don’t forget to factor in additional expenses that come along with home ownership like maintenance costs, HOA fees, homeowner’s insurance, and utilities. I was extremely careful with all 3 of my homes to never purchase something that I would be in over my head. The last thing I’ve ever wanted to be is a slave to my mortgage!
Trust me, when you start looking you will always find bigger, more updated, better location than the next so try not to get in over your head. If I had gone for what I truly desired at that time I would have been stressing myself out and I’m so glad I always stuck to my budget and purchased conservatively. Remember with a home, there is ALWAYS something that will pop up, or break, or need to be fixed so make sure to factor all that in.
DON’T JUDGE A BOOK BY ITS COVER.
This is probably one of the BIGGEST tips I’ve come to realize. Listen, if you guys had seen the first place I bought, you may have been appalled, but it taught me to go in with an open mind. It was definitely ANYTHING but move-in ready when I made an offer on it and well,.. I still did. It was honestly disgusting, not updated, not kept up with well, dirty and just needed a complete refresh but the bones of the house, were perfect for me. In purchasing a home that needed more fixing up, I had a little extra budget to get new paint, new laminate flooring, and appliances to instantly update the home. Plus after 3 homes, I can honestly say renovating and making a home your own is truly the best part!
PUT AS MUCH AS YOU CAN DOWN.
I know it’s easier said than done, but putting a large down payment (at least 20%) on a home makes an incredible difference. I saved for years and years before I was able to have enough for a substantial down payment and I’m so happy I did. A few reasons why I think a large down payment is V helpful/important:
*You’ll have a smaller loan—which means lower monthly payments. With a larger down payment, you borrow less, so you have less to pay off. That means your monthly payments will be lower than with a smaller down payment.
*You’ll have lower overall costs. When you borrow less, you’ll pay less interest on your loan. That’s because the interest is calculated using a lower loan amount. When you put down at least 20 percent, you also typically won’t have to pay for mortgage insurance which is key! Mortgage insurance increases your monthly mortgage payment and in my opinion higher monthly payment is a no/no in my book.
*You may beat out other offers. If you are competing against a few different offers on a home (unless it’s an all cash offer) they most likely would look at your down payment to determine if you are a “safer” bet to close on the home giving you a better chance for your offer to be accepted!
*You start out with more equity, which protects you if the value of your home goes down. When you make a larger down payment, you have more of a cushion in case home prices decline. With a smaller down payment, you have a higher risk of owing more than your home is worth if market home prices decline, like they did between 2008 and 2012. If you owe more than your home is worth, it can be very hard to sell or refinance your home.
Hope you guys enjoyed my tips on buying a house. Do you guys have any other home-buying questions?! I’m an open book and love the topic so if you have any just let me know and I’m happy to answer from my personal experience! Love you guys!!
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I wanted to thank you for the advice for buying a house. I’m glad you mentioned that you should factor in any maintenance and utilities costs. This seems very important especially if considering these costs could drastically change what kind of homes you look at.