When we told our friends and family one month after our wedding that we were looking into buying a home, they thought we were nuts. We had been working in our post-grad school jobs for less than a year, and we had spent most of our savings on our wedding. Why in the world did we think it was a good idea to buy a house?!
Because that's how we roll.
I like to live below my means, then save for something big. Why would this be any different? Because with interest we could spend over $500,000 by the time a mortgage was paid off? Because by the time we paid off a 30-year mortgage it would be 2041?! Yeah, now I can see why you'd be concerned.
And anxiety set in...because that's also how we roll.
The best way I combat something that induces such fear is by learning about it. Dave and I immersed ourselves in any literature that could possibly educate us about financing, shopping for, and purchasing our first home. Along the way, we picked up little tips like these:
- The quality of a school district can change over time, so don't obsess over it too much.
- Student loan debt can actually make you look good to a mortgage lender, because it shows that you invested in yourself and in your future.
- Most young adults don't have awesome credit scores because they haven't had a chance to earn it yet.
- Sometimes sex offenders live in a neighborhood you're looking in. It's nothing to panic about, just something to be aware of!
- Closing costs are usually about $3,000-5,000. Like anything, they're negotiable.
- Expressions like "now is the time to buy" and "it's a buyer's market" have some truth to them.
- Buying a house is a lot like planning a wedding. Everyone will have an opinion, and not everyone will be happy for you...and that's okay.
- You don't need 20% of the cost of your home as a down payment. All you need is 3.5%.
- Regardless of whether you pay 3.5% or 20% as a down payment, your monthly mortgage payment won't be that dramatically different. With the price range we were looking in, the biggest difference we would have had is around $200/month, which isn't much in the grand scheme of things...especially if it means not having to find $50K this instant. Don't believe me? Play with some numbers and try it for yourself!
We also learned what kinds of questions we needed to ask ourselves.
- Is this a starter home? Or do we plan to be there longterm?
- What kinds of things do we need to have nearby?
- What features are absolutely necessary in our home?
- What features are nice to have in our home?
- What features do we not want in our home?
- Do we want a house that's move-in ready? Or do we want to fix it up in our style?
- Somewhat location specific: Do we want a smaller house inside Atlanta's city limits for convenience? Or do we want to go out in the suburbs for more house?
Don't get me wrong; I'm terrified. It's a big risk. But I'm also feeling really excited and empowered. We don't have much in savings, we have a ton of student loan debt, but we work hard and we dream big. I'm a firm believer that when you're armed with both knowledge and lofty goals, anything can happen.
So go ahead and empower yourself too! Tell me your success stories! Did you work hard to make your money work for you? Did you buy a house? A car? Go on vacation?