Why I Bought a House By MyselfI’ll break this down into the categories that I think everyone should use when determining if homeownership is the right thing to do for them, or if they’re truly ready to take this step.
- I intend to stay in my current city for the foreseeable future
- Renting a 2bd 2ba apartment costs more than a mortgage here (especially true on the apartments and houses I tended to gravitate towards)
- I had enough for a 20% down payment on the houses I liked, and I could afford the monthly payment without compromising my lifestyle too much. Plus, I have no other debt (student loans paid off, car paid off)
- Most of the neighborhoods I was looking at was also good areas to invest in (great school district, low HOA, newly built in 2016, detached unit, good commute to work for many professionals). This made me think that if something did happen and I had to move, I’d be able to resell without issue, and/or rent and cover costs.
PhysicalI’ve been living in a box, as my dad likes to say, for too many years to count. I’m lucky that I’ve lived in some of the greatest cities in this country; yet also unlucky that I’ve had to deal with such high rent and that I’ve always had to stay in studio or one-bedroom apartments. My poor family (who likes to come and stay for days/weeks at a time) has had to sleep on the floor, on couches and air mattresses, again for too many years to count. With a new home, I wanted the physical space to accommodate my family when they come to basically live with me for the short term. Plus, when my friends come, they come in large groups with their significant others; so again, I wanted the space to provide comfort and privacy. PLUS, I no longer wanted to live in a box.
I wanted to put down some roots; I’ve spent most of my life (childhood and adulthood) moving around and living in rentals. This is probably something no one ever thinks about or cares about, but I never had a childhood home that I’m attached to. I also have no attachment to any city I’ve lived in. The way some people have that “go-to” place that feels like home to them, I’ve never experienced that. I’m grateful for the life I’ve had and the unique experiences it’s given me, and maybe it doesn’t really matter to have those childhood spots and attachments, but it is something I’ve always wanted. I felt that buying a house, and having something ground me to this city, would lend itself to that sense of security and “home”.On the flip side, I did hesitate because it is just me. I’m solo single buyer and so the burden of payment and upkeep would be on me. I can afford it, of course, but I was concerned about the stress of it all. Ultimately, though, I decided that I was ready to take that step and I think that sometimes you have to make boss moves for yourself, without the help of anyone else. For me, this has pushed me out of my comfort zone, has made me face the world of adulting on a whole new level and has reinforced the amazing support that I do have from family, friends and my amazeballs real estate agent. Now that I’m moved and settling in, I’m so grateful for my decision. It’s so nice and satisfying coming to a place that’s mine. Will this investment of mine pay off? I sure hope so. In the meantime, I intend to enjoy my new space as thoroughly as possible.
Things to Do and Consider Before Buying a HouseThe home buying process can be long and very tedious. As a first time home buyer, you should make sure you are well prepared for taking this step. I had done some of these prior to my purchase, however, some things I quickly had to learn along the way and catch up.
Make a ListThe first step is to know what you want and take your time figuring this out. This is a huge investment, not just of your money, but also your time. This sounds basic, but make a list of:
- Things that are nice-to-have
- A detached unit, 2 story max (more than that is a deal-breaker)
- Less than 5 years old (or as new as possible)
- Commute to work less than 30 minutes even in peak rush hour
- Open concept
- Walk-in closet in the master bedroom
- Laundry room on the second floor (or same as bedrooms)
Dig down deep for your patience.Be prepared to not find what you want, or having to choose to let go of things you were really hoping for, either because it’s not affordable, or just not available. I caution against rushing into something because you’re getting impatient or frustrated with the home buying process. Even if you find what you think is the right home for you, you may not get it. You’ll also get antsy and irritated with your bank, the real estate agents and the seller during Escrow. It’s the worst period of time ever. So, just keep in mind that while you want to get it over with, you’re buying a house, a huge purchase, and it deserves the proper attention…no rushing it.
Collect your documents ahead of timeThank god for online banking; I would suggest that you make sure you have all the necessary bank statements saved and ready to go for at least the last 2 months. You will need proof of every transfer, deposit, or change in balance in the last 2-3 months. So don’t be like me and make small transfers; just do a big one once and have proof of the transfer ready to go (for earnest deposit and down payment). I went back and forth with my bank so many times due to this. In addition, be prepared to explain anything and everything related to your income, savings, and job. For further detail on what you need to gather, check out First-Time Home Buyer Tips (What You Need to Know Before You Buy)
Find a real estate agent you get along with and trustMake sure your real estate agent (if you use one), is someone you can trust and get along well with. Mine has basically turned into a friend of mine, and I leaned on her a lot during escrow to help me through it and reassure me on the steps. You want someone you can rely on and who will go to bat for you to make sure the sellers are moving along and the bank is on time with their requirements (she literally was constantly on the phone with both for me). Having this kind of support is invaluable.
Get mortgage pre approvalBefore you start looking it is a good idea to speak with a loan officer at the bank you’ll be obtaining your home loan from. They’ll help you calculate your debt to income ratio and tell you how much home you’ll be able to afford. This will give you a great idea of the budget and range you should stay within and will give you a heads up on the monthly expenses you can expect. In addition, when you get pre approved, you can ask the loan officer to show you the interest rates and monthly mortgage payments tied to the different types of loans that are out there. Most people go with conventional loans, but there are also FHA loans, VA loans (if you’re a veteran), and 5/5 ARM loans. In addition, the affordability of a home can change depending on the mortgage rate you lock down, and the amount of down payment you’re able to give. Yea, I didn’t know about all this either, so use this opportunity to learn what’s possible and get the best possible mortgage for you. Being preapproved can also help when you actually are ready to make an offer, as the bank already knows you and can use your preapproval to expedite getting all the paperwork started.
Start looking for homesTo get started with your house hunting, take a look at sites like Zillow or Redfin and see what’s out there in the neighborhoods you’re interested in. If you don’t have an agent or are unsure of where to begin, then trying to attend open houses. It’s an easy way to see a place, ask questions (there’s usually a real estate agent there to help) and get a sense of what is available in or around your price range.
When you do find what you’re looking for…
Do your due diligenceDo every due diligence you possibly can on your home, e.g., home inspection, etc. You want to limit the number of surprises once you move in. In addition, ask for as much as possible from the sellers regarding repairs and updates. The worst they can do is say no.
Read before you signDon’t sign anything without knowing what the heck it is. In the era of Docusign, it’s easy to sign and not read the page. Please just scroll through and see what you’re dealing with. I’ve caught many mistakes from the real estate agents, the sellers and escrow because I was crazy about reading everything.
Make sure you can afford itGuys, please do all the calculations of how much money you may need before you go about buying a house. Speaking with a loan officer (see above) can really help with this. Being house poor is a real thing and paying off your mortgage can be a very expensive strain on your finances. The way I see it, you shouldn’t buy a home if you can’t put 20% down. In my opinion, one of the benefits of owning is that you build equity. However, unless you are putting a full down payment, all you’re doing is buying debt. That being said, do NOT drain your bank account for a house; if you are putting down 20%, then make sure you have money left over after it’s all done. Being all done includes the down payment, closing costs, and the cost of moving. In addition, what you have left is going to be the basis of your emergency fund and your cushion for all those new home expenses.
Clarifying new home expensesJust to be clear, when I say new home expenses, I’m not talking about furniture. That’s a separate issue. What I’m referring to is: professionally cleaning the home, changing the locks, transfer fees for waste management (they charged me 70 bucks!) and any other monthly bills that will be immediately due. That’s just the tip of the iceberg. The last thing you want is to be in a financial situation where you have no cash left over after buying a house and then get stuck carrying a balance on your credit card just to get through those first few weeks. So, moral of the story: when you find a home that you’re serious about and are going to make an offer on, do the calculations to see what your mortgage will be, the loan amount, compare the monthly mortgage payments across the different loan types available to you, include closing costs and fees, and then make sure you have enough for all of that and your new home expenses. If you don’t, then wait until you do.
That being said, don’t be afraid to take the leapI didn’t know this, but from the time your offer gets accepted, to when the whole process gets locked in, there is a 10 day gap. Within the first 3 days you’ll give what they call an earnest money deposit, which equals approximately 1% of the purchase price (some sellers will demand more as a show of good faith). Then you get a week to do your due diligence (see above). Only after the due diligence is done and you’re satisfied with the home you’re buying, will you sign a document to “remove contingencies” with your lender to move forward with the loan process. Up until that document is signed you can pull out of the deal and get your deposit back. Buying a house is scary, and its even scarier to fork over the cash. However, just know that nothing is sealed until you say so (and even then, if the bank discovers something during their home appraisal, they may refuse a loan and you’d get your money back then too). So if you find something that you like, that has all that you want, then take that leap and at least make an offer. I made three, and lost, before getting my home. Each attempt gets easier and you learn more each time. So, if the decision is the right one for you and you are ready to buy a home, then don’t be afraid and get out there and try.
Key TakeawaysHome buying, especially your first home purchase, can be very stressful and tedious, yet when you find the right one it can really add to your quality of life. No matter what you decide to buy, a single-family, condo, or townhome, make sure that you are armed with the information you need to make the decision to buy a home: know your must-haves and deal breakers, speak with your real estate agent about the housing market, gather all the information you can from your loan officer, know what you can truly afford and have all the documents you need readily available. Overall, make sure you are ready to take the leap and make the commitment to being a homeowner! Good luck!
Are you thinking of buying a house? What are some things you’ve learned along your journey?
Sanjana is a physician anesthesiologist, avid traveler, and entrepreneur. She founded The Female Professional in order to give women a voice, a community, and provide resources to help them overcome hurdles and achieve success. With her experiences as a physician, as a CEO of a startup, and as a writer, she understands the struggles and frustrations that women face. She also understands what it takes to move past those things and come out on top. Through this platform, Sanjana aims to empower women to be their best, authentic, selves, achieve work/life balance, and live life to the fullest.