Buying my first home

I hate when this forum tells women to "invest" in *multiple houses (or "real estate"). Especially when that money could be used to invest in a woman-owned business, buy reliable stocks, literally anything that doesn't ruin every community in North America.

HVW do not hoard basic resources.

Howdy! Congrats on being ready to buy a house. I'll share my experience:

As a single mom of 3 little kids, I bought my home 15 years ago (ancient days!) with 0% down and 6% interest. This was literally days before the housing craah and I got one of the last First-time Home Buyer Fanny Mae loans. Before I bought, I shopped for houses for a year. I wanted the best deal in the nicest neighborhood because I knew it would be a good investment. Finally I found a quality house in an amazing neighborhood, but it needed a ton of updates. It was ugly, but it had great bones. I was house poor for about 2 years (child care cost more than my mortgage!), but as my income increased, things got easier. Eventually I borrowed against the house to remodel it, (raising kids on my own was expensive), and it is gorgeous now and worth 2.15x what I paid for it. PLUS, I was able to raise my kids in an upper-middle class neighborhood with lawyers and executives - as a single mom. My kids are now grown, and I'm getting ready to sell the house. I'm shopping to buy two smaller homes in locations I love, with the proceeds (for myself! - I don't want the hassle of renting to others).

My advice:

1. Be ruthless in vetting houses. Buy the cheapest house in the nicest neighborhood, even if it needs some updates. The appreciation will reward you much more than if you buy a nice house in a cheap neighborhood. Stay away from "flipped" homes as they're usually cheaply renovated w low quality materials

2. Negotiate ruthlessly: make sure your realtor is willing to offer the (lowball) price you want

3. Get a thorough inspection. Pay extra for an engineers' structural inspection and a drain inspection. No surprises!

4. Look for a house that's been on the market for over 6 months. A year+ is better. Offer 10-20% less than the list price. Move on if they don't take it

5. Don't get emotionally attached to houses when looking (this is hard I know!). Go for the best deal, best location, best resale value.

6. Purchase a home warranty. I can't stress this enough! If anything goes wrong, especially the first few years, you won't be on the hook to replace the furnace ($10k) or other large appliances. I had one for several years til I understood the house better - I got a free AC unit ($8k), free washing machine repair and jacuzzi tub rebuild on my $400/year warranty. You can let go of the warranty once you have a better feel for what's on its last legs in the house, and what is doing fine.

7. Be prepared to be house poor for a year or two. But after that it's so freeing to have the same payment while your income & equity go up! It's like putting $1,500+ in savings every month. Create an amortization schedule and look at it regularly to celebrate how much wealth you are building

8. Make a list of everything that bothers you about the house when you move in. Then slowly work on the list. You'll stop seeing eg ugly light fixtures after a while & you don't want to forget later.

9. When you're ready to sell, you're not stuck. Try reading "Sell Your House in Five Days" - I've done this sale method twice and it works like a charm. You can get old editions on Amazon or at the library. It's brilliant. This method saves you 6% on realtor commission. Plus it's done in a week, rather than having people tromp through your beautiful home for months, and low-ball you.

10. Mortgage interest and property taxes are tax dedications. You can write off tons of $ just because you own a house. My write offs have been up to $20k+ per year. This will keep more of your $100k+ income in your pocket

11. Set up a home office in the house. Make it 10-25% of the square footage if possible (basement?). You can now write off 10-25% of every penny you invest in the house, on your taxes. Paint? Landscaping? New roof? 10-25% of the cost, off your taxes. You can even deduct 100% of all artwork, supplies and furniture used in the home office. It's called a Schedule C, and you can use it even if you work for an employer. Ask your tax expert for more details

12. Sweat equity remodeling can be lucrative & increase your home's value. Paint is cheap and takes a weekend to do a couple of rooms. You can buy (large) scrap pieces of Granite/quartz countertops for cheap! And the company installs them for free/cheap. I replaced all my own light fixtures in the house, myself! Except ceiling fans (those are a pain because of the weight and movement - and worth paying for). Insurance will cover your roof replacement(s) & gutters, especially if you get hail storms. Your biggest expenses will be exterior painting, flooring and window replacements. So save money for those. Exterior Painting needs to be done every 8 years or so, and windows/flooring should be replaced only as needed. Buy small evergreen shrubs (like boxwood) for landscaping - I paid $5 each for mine 12 years ago, ripped out some really ugly creeping juniper, and now I have a gorgeous permanent hedge that is green all year. Plant perennials so you're not replacing them every year. Mulch will be your friend, haha.

13. Donate all replaced appliances, furniture and fixtures. Itemize every item and its value. Use a tool like "It's Deductible" from turbo tax to help. You can save $$$ on taxes this way. Btw, you can deduct literally every t shirt, towel, potholder and mug you donate as well. Itemizing my charitable deductions over the years has saved me $ thousands in taxes - whether you own a home or not!

That's all I can think of for now. Good luck! Owning a house is an adventure, and can be very financially lucrative. Take your time shopping, be really picky and watch for good bones. Have fun!

Just bear in mind that most people buy a house with two incomes and help from their parents and family. The spouse and the parents/family also help maintain the house: paying for repairs, recommending contractors and repair people. It's a ton of work for just one person to do by herself.

There is a lot of societal pressure to buy a house and people judge you for renting. Just remember the majority of those people are pickmes who had help from mommy and daddy.

I bought my first home last year. I live in a low COL red state and only make a median salary, but was able to get a pretty nice condo for around 200K at 5% down. Mine was the only offer and the seller’s paid my closing costs. It was a shockingly easy process in my case. I would’ve liked to put more down, but I was so tired of throwing $1,200/month away to a landlord.

I’m not a financial advisor so I can’t tell you what you should do, but I will give you my own reasons for buying, despite the high interest rate.

Like you, I was very concerned about the rental prices skyrocketing. I live in a state that has no rental cap protection for tenants, so my landlords could raise rent as much as they want just because they want to. Since housing is becoming so inaccessible to lower and average earners, landlords were starting to take advantage. I assumed it would only get more difficult to buy. Time will tell I guess.

I don’t regret it at all. I have a brand new HVAC system and my utilities are so low that no one believes how little I pay. My HOA does my mowing and repairs my exterior at no extra cost, including the roof. A condo is a great first home option since someone else is taking care of some of the responsibilities in some cases. I see the house as my greatest asset, and if I don’t get married (and I probably won’t) I don’t plan to upgrade to a bigger home. This will give me a huge advantage since I will own this home by the time I retire. Interest rates will eventually lower and I can refinance to make things easier. Right now finances are tight, but I’m working very hard to increase my income. I’m also saving very aggressively. I just see this as a period of a few years where I can’t be buying many luxuries. No getting my nails done or getting sushi every weekend. Only one Starbucks per week, which has been hard. It’s helping me learn to live minimally, which is a lesson I needed anyway. I’m going back to school at my employer’s expense so that I can hopefully switch to a higher-earning industry. You will be able to increase your income as well. 100K is fantastic, but it doesn’t have to stop there.

I would say it wouldn’t hurt to start the process. Pick a home, see what your payment would be, and try and see if you can manage it with your budget. With your DTI ratio you could probably get a great interest rate (compared to what most are getting now, that is.) There’s no commitment until you sign a contract. You should also be able to get the seller’s to pay a percentage of your closing costs since the market has slowed down. I definitely understand your caution and it’s very likely that you’re making the right call by wanting to save more before making such a big decision. But you can at least see what’s out there and get more info on your options.

Im in a similar boat, but I make 70k per year and ive got about 10k for a down payment. I’ve also bought and sold a house before with my ex, so I am familiar with how it works. On a side note, highly recommend listening to financial feminist/herfirst100k for finance advice - she’s great.

As for your car loan, keep making the payments on that since it’s 0% interest. How much interest are your student loans at? Housing interest rates are like 6-7% I think so it might be better to keep making payments and then save for the down payment for the house if the housing interest rates are higher. If you’re interested in seeing how much you could be approved for, you can contact mortgage finance companies to get more of an idea of what you can afford. Your credit score is amazing so you’ll definitely get like the lowest interest rate you can.

You mention a house being a big commitment, I bought a townhouse last time and I loved it, it was the perfect mix between a house and something more low maintenance like a condo. I didn’t have to do yard work, yet still had a little side yard I could plant flowers in, and I had my own garage and didn’t have to walk down a hallway and see neighbors when getting to my place, so it was definitely a win all around imo. I’ll be looking for a townhouse or condo again because I don’t have a dog or kids so I don’t see the point in having a yard to take care of, and I liked that the HOA took care of snow removal on my driveway and outside maintenance. If you are only considering a sfh and don’t like the high maintenance part, highly recommend looking into maybe something like a townhome.

• you want a house or apartment? How much is the average price of each in your area?

Where I live we have a choice to put 5% down or 20%, so that would make a huge difference for you, depending on the prices.

I'm not a financial advisor, but my instinct is saying to pay off your loans with the money you have saved because then you'll be able to save a down payment even faster after it's gone since you make good money.

However, the cost of places continues to climb. Is it possible you could roll your student loan debt into your mortgage?