6 Things I Learned While Buying My First Home On My Own
Hooray! I’m a homeowner!
FUN FACT: If this were SIXTY years ago, I couldn’t own property as a single woman and was barely considered a human in the eyes of the Constitution. Technically, I’M STILL NOT, but at least single women can own property and they can even open a credit card without approval from their husbands. LOL.
I bought my condo just as the market was winding down, and mortgage rates were going up. The good news is that I didn’t have to fight against a bunch of offers or go over-asking. The bad news is my mortgage rate ain’t great. Oh well. I’m proud of the 1,350 square feet of space that is my own in a building from 1910 that once had Irish maids in its basement. Now, it has an Irish maid in its APARTMENTS! Movin’ on up.
Earlier this year, I moved in with my family in order to save up. I’m grateful I had that opportunity, as I know that not many people do. Honestly, it’s unfortunate that it almost HAS to be an option in order to afford a home. I’m thankful (and privileged) that I had help… and a 401(k) to steal from. Buying a home (especially when you’re single) is a ridiculous cost.
In honor of transparency, here is how I was able to make it happen:
Moving in with my family and not paying rent (obviously)
Sharing many subscription services with my sister (aka she pays for them all and I stole from her)
Switched to a higher paying job this year
Automated payments to my savings account (I did 2x a month on the days I got paid)
Took money from my 401(k) - in most cases, you are able to take up to 50% as long as you have proof it’s for buying a home (Disclaimer: You need your Purchase and Sale agreement in order to get the loan, but you don’t get this until after the first deposit is made… so don’t count solely on this loan)
A small loan from my parents for the remaining down payment
Somehow got lucky and my offer was accepted at 3% down payment (I know it’s not always the case, especially in a crazy market)
Now, I’ve started doing/teaching comedy again and all those costs go directly to my mortgage
Advice I’d tell myself last year:
Automate savings payments. This was the best, easiest thing I did. Every time I got paid, 20% automatically went into my savings. So twice monthly, 40% of my income went into my savings account. I barely noticed it, and at the end of the month I’d see the account rise and it was thrilling. Sometimes, that would make me want to add more if I could just for the thrill!!!
Save more for closing costs. You’re not just saving the money you’re putting down, you’re also saving for closing costs. I was advised to set aside $7-10k for closing costs, and they ended up coming out to about $8k. So, save for whatever percentage you’re putting down PLUS $10k-ish for fees you pay for the attorney, lender, inspection, title, etc.
Stay put. Don’t switch jobs, buy a new car, or open any credit cards when you know you’re going to start looking for a home. This didn’t hurt me, but I did switch jobs earlier this year so I had to pause my search.
Know how to quickly access everything. All of your statements - bank statements, 401k statements, pay statements, loan statements, tax information, W4s, and even contacts for employee referrals for your current and former employers. My attorney said, “Your new part-time job is quickly gathering and sending documents” and she was correct. She told me during closing that my speed was so helpful in getting the loan closed on a quick schedule, so if you’re also into arbitrary brownie points - then be aware!
Be patient. During the underwriting process, you’re going to get some weird questions like, “What was this $500 purchase at Target?” and you’re going to feel like you have to justify treating yourself to some comfortable patio furniture! Don’t take it personally, or as a sign that something’s wrong. Just be patient during the whole loan underwriting process because it takes a while and makes you question everything.
Work with really good people. I reached out to my college friend, Amy, because A) I like her and B) I knew she’d be tough. I am very bad at negotiating, and I tend to make decisions with my gut feelings. I knew she’d ask questions that I would never even think of. She did! She also connected me to a great lender, and a great lawyer, and guided me through the whole process. It felt smooth and easy because of her and I’m so grateful!!
I am so excited to eventually share before and after photos, but the place is coming together nicely. I’m trying so hard to be patient (aka tip #5) but I just want to DECORATE!!!! I’ve loved sharing little pieces on my Instagram and getting feedback from people. Yes, I immediately painted the entire place PINK! Well, almost. There are some greens, too.
This Christmas is going to be the BEST CHRISTMAS OF ALL!!! Although there will be no presents… but who needs those when I’ve got a HOME?!?!