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i don't know about you, but i would like to own my own home. i want to be a queen in my castle, not a slave.
i'm studying real estate laws and have compiled a list of steps towards becoming a homeowner.
granted: i cried while creating this list because i am so far from my dream budget (or at least it feels that way), but i took a few deep breaths through my tears to keep going while reminding myself that i know that i will make this happen or die trying.
1 BUDGET
property taxes (1% of assessed value, subject to a max 2% increase per year...this is for CA as of 2021, laws may differ in your state/country). paid in two installments (Nov + Feb)
loan-related fees: application, loan origination fee, appraidsal fee, credit report fee, discount points to lower interest rate
title-related fees: title search, title insurance, recording fees
escrow + attorney fees
property inspections, survey fees, prorated property tax or HOA dues
insurance premiums: homeowners insurance, fire/flood, mortgage insurance iof downpayment is <20%
notary fee, courier fee, doc prep, etc.
infrastructure improvements
previous homeowners may be eligible for property tax base exemptions
2 GET PRE-APPROVED FOR A MORTGAGE:
income
employment history
credit score
3 FIND A REAL ESTATE AGENT
4 HOUSE HUNTING:
attend open houses
schedule property viewings
evaluate condition, location, price
use a Bird dog system
5 MAKE AN OFFER + NEGOTIATE:
this is based on markey value, conditions, contingencies (inspections)
6 CONDUCT INSPECTIONS:
hire an inspector
linspect structure, plumbing, electrical systems
negotiate credits/repairs
7 SECURE FINANCING:
work with a lender to finalize mortgage application process
appraisal will be conducted by lender
8 CLOSE THE DEAL:
sign loan documents
transfer funds for downpayment, etc.
obtain homeowners insurance
get keys to your new home
if i can achieve this, i will be the first woman in my family to own my home without the assistance/sponsorship of a man. i'm terrified and excited.
for those of you Queens who are already homeowners, please add your own experiences and responses!
chase dreams, not people 👑
I became a solo homeowner last year after years of dreaming about it. When I first graduated from school with mountains of debt, I did not think home ownership would be in reach. But by being financial responsible over the years, I made it happen.
Prioritize saving as much as you can. I was really into the idea of financial independence, so I worked up to automatically saving a quarter to third of my income every year. Every time I got a raise I rolled the increase into savings rather than adjusting my lifestyle upwards.
I did not take advantage of a government-backed mortgages, but if you do you can pay a much lower down payment, which makes the amount you need to save much less overwhelming. However, this can also affect the buying process. When I purchased, there were bidding wars over every house, and not having to go through the extra hoops and delays associated with an FHA loan gave me a slight advantage over competitors.
It is definitely good to educate yourself about the process, but don't feel like you have to know it all. The realtors and mortgage companies are well-versed and will be able to provide a lot of guidance, so focus on finding a team that you trust. I had an excellent realtor, and through her I was referred to an excellent mortgage company and excellent contractor. Finding a great realtor is like dating; there are a lot of scroty people who may try to talk you out of your standards. But when you find high-value people, the process is amazingly easy. Make sure you know exactly what you want and look for a realtor who respects that.
That being said, be reasonable! Don't buy more house than you need just because you might qualify for a higher mortgage, and don't feel like you have to find a perfect house. Instead of paying $200,000 for a brand new house in perfect condition, you could buy a $150,000 slight fixer upper and spend $20,000 to fix it up to your standards. You will still have your dream house and spend less on it. It makes more financial sense in the long run to pay out of pocket for renovations than to pay interest on perfection for 30 years.
Another option is to househack, renting out a portion of your home to help cover the mortgage payments.
It's not for everyone, but I changed locations in order to buy a home. I knew I would never afford anything in New York City, and I did not want to spend $300,000 plus on a house. I made a strategic decision to relocate where housing prices and property taxes are lower.
Get yourself a book like "The Complete Book of Home Inspection" so you feel empowered when you are viewing houses and know what repair issues are minor and what are dealbreakers. Similarly, a book like "The Big Book of Home How To" can help you get comfortable with maintaining the home. Even if you decide to outsource the labor, you will have a better understanding of home maintenance and will be more confident negotiating with contractors.
Good luck!