So maybe you’ve heard me mention it a time or two on this blog or maybe this is your first time here. But we are purchasing our first home.
I’ve been a renter all my life. Even when I was a child we only owned a home for the first few years of my life. My father traveled a lot for his profession and we were always changing countries or states. When I was older and living with just my mother and my sister we were too poor to own a home and since I’ve been married we’ve been praying about when, where, and if. Well all of those have come together and we’re now in the process of buying a home.
Now just in case you’re thinking we didn’t just wake up one day and decided to buy a home. But instead we felt the nudge in our hearts a little over a year ago to set some things in place so that this would be a seamless for us as possible. I didn’t think it would take over a year and is it seamless? Well no. It is very time consuming and at time’s trying but I believe it will be worth it and we’re learning a lot.
Now just for some background information. In the home that we’ve been renting for the 6 years we feel like we’ve gotten a good intro into home ownership. Going into this place, it was new construction that didn’t sell during the boom. We took on all the utilities, garbage, water, and even some household repairs. Many of the things you don’t usually have to worry about in a rental. We know what we can afford in terms of home with these bills added on. So funnily enough we’ll just be transferring all of our accounts when we move because we’ve had them already.
Starting the Process
The first thing we did was to take a home buyer’s class. Most US states have these and if you fall under certain guidelines you can get some help like down payment assistance etc. My husband is a veteran so while we didn’t use the program to buy our home we still learned a lot that has been very helpful in buying our first home.
We had another family member who was searching to buy her first home at the same time as we were so we sort of supported each other through all of this. She was coming from very bad credit so the first thing we helped her through was paying off her debts and establishing good credit. She actually was able to do this very quickly so if this is your situation maybe some of these tips can help you.
Getting Credit in Order
1.) Organized her bills and accounts so she knew what she was paying monthly.
2.) Got rid of some not so necessary monthly bills such as netflix, hulu, etc.
3.) Started to pay off her bills. Start with working hard to pay off the smallest one. If you can pay it off do it! Take that money that you used to pay on that bill and pay it to the next until you pay that one off. Keep doing that until they are all paid off. This took her about 6 months.
4.) Reign in excessive spending. We did this too. Browsing and shopping for “stuff” were off the table. We’re only buying needs here. We did fit in a vacation in here but it was done very frugally where we only paid for gas and food (which we brought).
5.) Start a savings account.
A Snapshot of Your Future Monthly Outgoing
Now for us the story was a little different. We had paid off our debts and bills early in marriage and living in own no man land. Lovely place to be. But since we didn’t have the huge amount needed to pay for a home in cash we were going to be dependent upon a mortgage company for a loan. So after our initial meeting with them there were some things they wanted to see. We had to get a credit card. (Yes we fussed big time at them). Our loan officer discussed how to use the card so that we didn’t wrack up a big debt and keep it paid down but make the mortgage company happy.
Some other things we did on our own was to budget our new supposed monthly mortgage. At first we thought we could only afford a certain amount. Our loan officer tried to tell us differently but you know we just figured she was after our money. After going through our incoming and outgoing we found she was right. We found all sorts of places where we were just throwing money out the window. But really we didn’t want to be house poor. You know working hard to pay for a house. So we came up with a plan to put our proposed higher mortgage into savings each month and see how well we were still able to do everything we always had. We did this for six months and were surprised at the results. Not only were we able to live as if we had this higher mortgage. But we also built a sizable savings in the process. One that helped us to put more down on our home.
So how did the home buying go?
Well our other family member who paid off her debts and established good credit purchased her 1st home a year ago. Her process went very smoothly and she actually is building a good savings and is a responsible home owner.
For us it took longer to find our perfect home. We finally did find it a few weeks ago and we’re in escrow right now. Praying every step of the way. Our proposed payment plan worked out well and we’ll actually be paying about $100 less per month than we thought.
Next up I’ll post on what we were looking for when it came to a home. I tell you we went back and forth on this!
More Information on Buying Your First Home