Coming from someone who never saved a penny, let alone who even liked to work (and still doesn’t). I want to share that it is completely possible to buy a home and not make many if any sacrifices. I’m going to make this short and simple. My home-buying experience was spur of the moment. I was 8 months pregnant rushing into buying a home. Renting was not in the cards for me, I found it to be a waste of money. If you’re not renting at the moment, then your chance of buying a home is a whole lot easier.
The first step in buying a home – deciding to buy a home!
I would have never even thought about buying a home, especially at my age. Until you have a reason or the willpower, it just seems so out of reach. I’m here to tell you that is not the case at all. Let me start by telling you a little about my own experience. I started looking for houses and within the first month of my search, I found a home I really liked. I didn’t have a preapproval and have only been at my job for the last 6 months. The day after I viewed my home I reached out to a mortgage consultant immediately to get my preapproval letter even after I had already put in an offer. It was risky and most realtors will frown upon this but my mom was my realtor, and as I always say when you want something bad enough, make it happen!
Now let me just say my mortgage consultant made this possible and I owe it all to her! I had reached out to multiple mortgage consultants when I decided I wanted to buy and a lot of them told me there was no way I would be able to do this. But the one I ended up going with immediately got me a preapproval letter the very next day not even knowing if I would qualify or not. So advice number one is always to get a second opinion, some people are better at doing their jobs than others. Okay, so the home I put an offer on wanted a preapproval letter before accepting my offer. What happens next?
ACCEPTED OFFER!
So this is great news but now it was time to really get to work! They looked at every nook and cranny of bank statements, job history, you name it, and to be honest, all of it looked.. well terrible. I had tons of overdraft fees they could see where all my money went and I didn’t have any money in my account. Once I got paid it was pretty much… well gone. Swipe here, swipe there, swipe swipe swipe.
All my money went towards takeout, coffee, makeup – you name it.
So now let’s get into the good stuff.
What do banks look for when it comes to buying a home?
So most banks want to see that you had/have a stable job of at least 2 years.
Well if you’re like me and can’t hold a job the best thing you can do is to keep returning to the same work industry. For me, the longest job I ever held was my embroidery job for two years. After that, I went to a different company and worked as an embroidery office assistant. When I applied for the mortgage I had only worked there for 6 months but because it was in the same industry they liked to see that. So if you are interested in buying a home and have a hard time holding a job then my next big advice to you is to stay within the same job title.
Next, although my credit wasn’t necessarily the best. My payment history of bills was always paid on time. I did have to pay a few things off like credit cards which weren’t much because the next thing is your debt-to-income ratio. I don’t remember the ratio but it has to be under 42%. This is the total for all your bills combined including the expected mortgage payment, auto loans, credit cards, etc.
You can use a calculator like this one DTI Ratio Calculator. This can help you determine how much house you can afford and If you are in a good range in terms of debt-to-income. If you are above you may need to look at paying some things off or look for something cheaper in terms of what you can afford for a mortgage payment.
Why roughly January-June is the perfect time to buy!
Thankfully, when I was in the stages of buying my house, I had already filed my tax returns. Yes, that helped me to come up with that chunk of money for a down payment and or pay down any debt I needed to be approved! This is huge, I’m a horrible saver so that is why the beginning of the year is officially PRIME time to buy a home. If you are no good at saving money this is the perfect opportunity for you to come up with a larger lump sum of money. Perfect for that down payment.
Once I knew I was in the middle of buying a home. The entire time I just saved every penny, so like a month and a half worth of income. I put my entire check into my account and had to make it look like I had money. This was easy to do because it was a short-term saving approach towards a big purchase that I really wanted. If this was a long-term sacrifice I had to go through it would not have been possible because again I can’t save money for the life of me.
So maybe there is a little bit of sacrifice but not really because this was only for two months. After all, I was already in the process of buying a home and had no money whatsoever. Now because this was so last minute, and I wouldn’t have all my down payment until literally the day of closing on my house. I did have to come up with the money prior. This is where my grandpa stepped in and placed his own money into my account to just sit there until the day of closing.
So, if you need the funds in your account in advance they do need to know where the funds came from. You can simply write a letter saying “These funds were gifted from my mother” or Grandparent or whoever. IN CASE YOU’RE WORRIED: The day I closed on my house my grandpa did receive his money back, but without him, this wouldn’t have been possible! So, thank you, Grandpa! (And honestly, it would have still been possible but not for the house I was set on buying. I would have gone back to house searching and would have had to buy a different one but at least now my down payment money was there. It was just cutting it too close!)
Back to making sacrifices, I don’t see it necessary. I say keep buying your $5 coffee or your what is it $15 a month Netflix subscription. Just make sure you save any leftover money you have in your savings if you’re planning on buying a home. If I was planning instead of acting sporadically, I wouldn’t have had to make any sacrifices. I would have just made sure I paid myself first.
Four years have gone by since I bought my house. I have two kids now. I work part-time at 24 hours a week, so I don’t have to pay for daycare. My income alone pays for my mortgage, utilities, water, auto loan, and internet. No, I don’t have spending money but that’s what my boyfriend’s income is for. He takes care of the other expenses like groceries, vacations, clothes, etc. Now if I were a single mom I would be just fine if I worked a full-time 40-hour-a-week job, but we all know that’s a hard no for me. 🙂
Whatever your goal is, never give up. I bought my house making only $15 an hour. If I can do it, you can too!
Final Thoughts!
Although I bought my house in 2019, and before you say house prices were lower then – so was my income. I now make roughly $25 an hour. There are still cheaper homes out there even in today’s market. My Final advice to you is don’t be afraid to buy a cheaper home. There is always the potential to create a home you will love! Check out my cheap little house and see how we were able to transform it into a home. Nobody wants an insane expensive mortgage anyway. Cheaper is the way to go!
Here’s why:
- Most homes have lots of potential you just have to envision it.
- If you do decide to only stay for a little while a little TLC can go a long way and you can walk away with a nice chunk of money to use towards your dream home.
SPOILER ALERT: In four short years we transformed this house into a home. I absolutely loved this house but there was one thing we didn’t care for. Location! We were 25 minutes away from our hometown which wasn’t the worst thing because we did learn to love it here, but we were settled right on a busy road AKA the main drag!
- With two small children, we decided to make a tough decision – We sold our home!
- I watched the market for two years prior and when the market finally reached its highest we put the house up for sale and it sold just two days later! We walked away with enough money to purchase our land and materials to DIY build our forever home!
- If you are interested in a DIY build you can follow along on our journey because I will be laying it all out for you right here! Remember when I said who wants an insane mortgage anyway? We don’t, we want freedom and this was our chance to take a swing at it! Think we can reach our goal?
Follow along here to find out!
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