I took one step in the house and I just knew.
“Oh Natalie, the look on your face,” said our realtor.
It was the look.
The look
of
disgust…
In other words:
We bought our very first house!
But first, a little backstory:
We were outgrowing our apartment quickly. We were looking for a home to purchase but weren’t finding any that would worked for us. It was also the middle of a pandemic which, interestingly enough, brought the highest (and fastest growing) home prices we’ve ever seen as a country.
Just what first time homebuyers needed…
Renting didn’t bother us – it gave us more time to save up for a house – so when our realtor mentioned that she knew of a house in the country for rent, we jumped at the chance.
And we got it! We moved to a house a year ago and, to my surprise, I really enjoyed country life! (I was VERY skeptic at first due to a previous horrendous country living experience.)
It was beautiful.
When it came time to renew our lease, our landlady decided to sell the house. Slightly blindsided but we recovered -that’s one of the things to consider when renting. Renting provides flexibility for the renter, and the landlord as well. We were able to get a 6 month lease to buy us time to look for a new place.
The Housing Market
The last thing we wanted to do was look for a house during year 2 of the pandemic, when lumber & home prices were continuing to skyrocket in the seller’s market but, alas, that’s what we had to do.
Just a little context for how CRAZY the housing market was in 2021:
People were writing in their offer that they’d name their first child after the seller if they selected their offer. And still didn’t get it.
“We made an offer on a house and offered over $100,000 OVER asking price. They still chose a better offer than that,” one reader said.
Orlando News
“Home prices nationwide … increased year over year by 18% in July 2021 compared with July 2020 and increased month over month by 1.8% in July 2021 compared with June 2021.”
The Mortgage Reports
Good Things Going For Us
One thing in our favor was the interest rates! Because of the pandemic, rates hit historic lows so it made cents for us to buy instead of rent this time around.
Another thing in our favor is that while we were renting, we took the time to build a good financial foundation. We paid off all our debt(!!) and were COMPLETELY DEBT FREE. For 2 years, we didn’t have any debt payments which meant we were able to save up an emergency fund and a down payment.
Read about our debt free journey here:
- Our Debt Free Journey
- Pre-Debt Free Journey | How We Got Into Debt
- A Beginner’s Guide: How to Get Out of Debt
We didn’t look at renting as throwing money away but rather buying patience. Rent was a small price to pay to set ourselves on good financial footing.
Side note: I cannot stress how important it is to be financially ready to buy a house and purchase one you can comfortably afford.
Comfortably afford means a certain percentage of your income, not necessarily the max amount the bank will give you. Dave Ramsey says 25% of your take home pay on a 15-year mortgage. The general rule of thumb is no more than 30% of your income tied up in debt.
Take a look at your budget to see what monthly payment you can comfortably afford. Then, look for mortgages based on that.
And yes, that means you probably won’t be able to afford your dream house on your first go. You may land a fixer uper.
Which is exactly what we did.
The house we bought needs A LOT of work. There was no competition on this house which, in this market, should tell you all you need to know.
Our realtor said that people our age want to buy their parents’ house. They don’t want to do work.
Good thing we’re not afraid of some work.
The house we bought is the fixer upper of the neighborhood. It was an estate sale and being sold As Is. (Think hoarders…) There was a smoker & a cat. And the cat had its way with the place.
The inspection revealed almost every major defect: mold, water damage, lead pipe, faulty electrical, and so on.
The one thing it had going for it was the solid foundation. It was built in 1900 with concrete / brick / stone. It’s basically a fortress.
So why, you ask, would we purchase a house with all these problems?
The yard.
1 ACRE.
In town.
That was the selling point.
That and we got a deal on it: under assessed value (which is unheard of in this market). It makes me feel a little bit better about buying when home prices are hitting historic highs.
The house was begging for someone to come in and love on it.
And that is exactly what we are going to do.
Can’t wait to see how the journey goes! Cora, Mya and Georgia are also avidly following along!