How I Bought My First House at 24
Buying my first home at 24
My hubby and I lived in many different apartments, some of which I absolutely loved but I could never quite justify paying what we had to pay for them. I realized quickly I was throwing my money away every month after just a short time of renting. I desperately dreamed of being a homeowner in the near future.
Now, I will admit this is something I don’t think most 21 year olds think about. My husband, Mike, and I began to look at houses and research the process of buying a house. We were clueless, and I’m not afraid to admit that. Between my low income and his low credit it turned out that we couldn’t get approved for anything. I continued to “window shop” online for the next year or so. In that time I also began to research and ask questions..A LOT. This was very important for me to know at least a little about the process.
Once I started working as a stylist with a steady income I set out to pay off my debt and start saving. We moved to a Mike’s hometown when I was 22. My goal was to give it a year to make sure that’s where I wanted to call home, then buy a house. That would give me a year to save up make sure my credit score was where it should be.
Oh the dreaded credit score…
First things first, to even be pre-approved for a loan your credit score has to be high enough . I was also told by my lender to be prepared to pay off any collections accounts(if I had any). I needed to make sure active accounts are current as well. Those go hand in hand. If you’re behind on all your payments your credit score is going to suffer as well. I was already prepared in those areas. My debt had been paid off 2 years before that and I had kept my accounts in good standings. Getting your credit score where it needs to be is the first “step” you need to take to buying your home.
The lender and the real estate agent
Once you are ready to make that leap you need to find a lender and a real estate agent. I found my real estate agent through a referral from a co-worker and she then gave me a list of lenders she likes. I was extremely lucky to have an amazing lender that answered all 40 million questions I threw at here. Anywho, the first real step in this whole process is the pre approval. Basically you need to find out how much a company is going to lend you(if at all) before you start looking at homes that are out of your price range. Once you have that a few different things are factors. The type of loan you get approved for can determine how much you have to put down.
The down payment
The dreaded down payment part. Yuck. This is where things get expensive. We were hoping to be approved for a USDA loan which is a zero down loan. Things don’t always work out like you wish. I was approved for a FHA loan, these require 3.5% down. Even though I had saved a good amount before we moved I had a hard time finding a job and blew through those savings in no time.I made it a goal to put away at least $500 every month towards a home and even more once we started looking at houses. Any time I had extra tip money it went in my drawer to eventually go in my savings account.
There are different down payment assistance programs you can apply for, they basically lend you your down payment and that amount is added to your loan. I didn’t want to make my loan any bigger than I had to so I was determined to have a good down payment. Another thing I feel is necessary information for you guys is that not every house will be covered by every loan. Different loans have different guidelines on what kind of property it will cover. For example, with my FHA loan my home must be owner occupied, so I can’t ever rent it out.
September was when we had to renew our one year lease and we decided the following December to get in touch with a realtor. We looked at our first house the week after Christmas. I was sooo excited! January we put in our first offer, which was rejected in a multiple offer situation. March we put in our second offer on a different house and again was rejected because of multiple higher offers. Yeah, the fun was wearing off. April we found a third house we liked and put in an offer. Finally, we got a negotiation!
The process begins..
Once you get here everyone’s process is different. It took until July to go under contract. Once our offer was accepted then came problems getting the loan approved. I had to switch lenders to get the loan done, which I was very disappointed about. My initial lender was amazing and knowing my situation being a first time buyer, made a lot of the “detail” decisions for me which I was so thankful for. But, after a long few(and very frustrating) months we were finally ready to close. I only had about a weeks warning of when and where i needed to be to sign the papers. It took 4 months from the time we put in our offer to the time we signed the papers. Finally we were home owners!
You can own your home too!
First the credit score, then get you an amazing real estate agent and lender, save for your down payment, and finally you get to house hunt! There’s no better feeling than coming home to something that truly yours! Good luck on buying your first house!