| 4-01-2019 • HOMEOWNERSHIP|
This is a significant day, in my life, as I became a homeowner for the first time. Just like everyone who took this journey before me, making this happen required lots of planning and preparation, consistent effort to budget, and determination to meet my income goals.
Here is how it all happened: I met with my lender, over a year ago, to talk through finances, worked through how much being a homeowner would actually cost, as well as if it was actually feasible in my current situation. I was purchasing the home solo, so wanted to be extra careful, as I wouldn’t have any backup if something went wrong. I wanted to work through different downpayment options, what my interest rate would be, how to get my monthly payment at a place Id be comfortable with. One mistake I made, was not factoring in just how much closing costs were! Its important to get a close to accurate number for your closing costs. Luckily I was able to swing closing costs in the end, but wish I had factored that in to my savings. Every little extra expense matters!
There was alot more to do than just save for a downpayment and closing costs, working on my credit was a big part of preparing. I’ve had very little credit history, so building that up, while keeping all credits at a low balance mattered immensely. Originally I started at a 659 score, and was able to boost it over 700, by paying off cards, and keeping a low balances for extended periods of time. Originally I was quoted 5% interest rate, and by boosting my credit was able to get a 4.6% rate. The lower interest rate made a significant difference in how much I’d pay on a monthly basis! It is so important to have a lender who will walk you through exactly how to go about raising your score- they know exactly what to do and how to do it!
When it came to my downpayment, I decided to put 10% down. This is typically what I recommend first time buyers to aim for, while it is not a full 20% to avoid mortgage insurance, it is significant enough to make a difference in your payment. BUT, what I decided to put down, is not right for everyone. Alot of buyers opt for 3.5% or a 5% downpayment, while others want to wait for a full 20%. I was looking for that happy medium.
Its funny how all things fall into place, because a year ago, all of this seemed so far out of reach. But today, I could not feel more ready for this new chapter. Buying your first home is never easy, and there are a ton of lessons to be learned, but the benefits will always be worth it in the end.
All-in-all, going through this experience first-hand will make me an even better advocate for my clients, especially when it comes to negotiating on their behalf (every extra expense matters!), being understanding of how overwhelming the process can be, and seeing just how many moving parts a buyer is dealing with at once, when trying to meet strict deadlines, and of course being an advocate for their best interests.