Major's First-Time Homebuyer's Guide: What I Wish I Had Known at 26
So you wanna be a homeowner? Yay, let’s chat!
This is a topic that I love to discuss. I have developed a small group of friends that love to freak out over World Market rugs and drool over Opalhouse finds on Facebook Marketplace. It’s so real, and we love it.
Becoming a homeowner was something that I never really thought about at age 26. I was fine with stacking my money and paying around $550 in rent for an all-inclusive room in a larger house. #Goals
One Sunday in 2015, my pastor encouraged everyone to step out and believe for homeownership. I honestly thought it was something I would have done after getting married. But I did it anyway - single and trembling! I found a realtor and got to work. It was hard. I had no idea what anything meant. I had crazy high expectations of what a realtor should do, so unfortunately, everything came to a screeching halt.
I took a course to learn all of the lingo and how to navigate the process, and at that point, I was empowered. I was recommended to a new realtor and an amazing loan officer, and I was off to a legit start. Remember, you can do this!
What I Wish I Had Known: Tips For Starting the Home-buying Process from a Millennial’s Perspective
So let’s get to it. Before I start with tips for embarking on your homeownership journey, I want to clearly state that I am not a legal advisor and I’m not a home expert — I’m just a young woman that loves to see people win. This does not include every single thing you need to know but it will definitely help if you’re clueless.
Step 1: Determine that you want to own a property. The process can be easy some days and make you feel like the world is crashing down during others, so make a commitment to the process. You’ll need the endurance.
Step 2: Be honest with yourself. How is your credit? Can you afford a home? Where is the bulk of your money going? Do you need to move in with someone to save up? These are all private matters that you will have to disclose to someone during the process. It’s better to get your credit score up and your debt down before starting. Schedule a consultation with a professional to discuss your current state.
Step 3: Take a course. Don’t be like me and expect everyone to explain everything to you. Your realtor is there to show you properties. Your loan officer is there to gather your financial documents and to handle your loan. No one is technically there to hold your hand. You’ll have so much more confidence if you can understand the system and what your options are. Here’s a great resource.
Step 4: Locate a realtor and a loan officer. Please ask for referrals from trusted sources. These are people that will help you make one of the biggest decisions of your life. They should be trustworthy, honest, excellent, and on your team!
Once you’re connected with a loan officer, you’ll get a list of things to send over. After submitting the paperwork, they will let you know how much money can be loaned to you. You’ll get something called a pre-approval letter. This is the first step in you getting a broad understanding of the cost of the home that you can afford at the moment.
Important note: Don’t make any drastic money moves at this time. Don’t leave your job, buy a car, etc. The goal is to remain steady. You don’t want to increase your debt-to-income ratio.
Step 5: Make a list. Check it twice. I learned a great lesson after I saw my twentieth home. Make a list of negotiables and non-negotiables. What can you live with and without? Pool or no pool? Two-car garage or large patio? Do you have the patience and money to manage a fixer-upper? Near the highway? Large kitchen? These are all things that you want to sort out before you start driving around and becoming house crazy!
Step 6: Ask your realtor to set you up on MLS. This is a multiple listing service that allows you to receive emails about homes that meet your criterion. Trust me, you’ll still end up with the glow of your phone shining on your face in the middle the night while scrolling on Zillow, but it definitely helps.
Reality check: You will likely want a lot of houses that you cannot afford at the moment. Don’t let that distract you. It’s OK to start small. More houses will come.
Step 7: Get an accountability partner. If you’re single or even if you’re married, find someone that can support you because it will be a fun ride!
Step 8: Keep going, even if you have to take a rest. Look, you may get your house quickly, but you might not. Maybe you’ll run into issues with your credit or the down payment, and that’s OK! Hold on to your faith, and take the necessary steps to get back on track, and just keep going until those keys are in your hands.
Helpful Tips To Consider
Get your credit score up. It’s crucial because it will help you get the best interest rates and enable you to qualify for more money for your loan.
If you just want to check out houses, visit Opendoor, which is a platform that enables you to visit houses without a realtor. You can also sell your houses through the system, as well.
You don’t have to provide 20% downpayment. If you don’t put the 20% down, you’ll have to pay a monthly fee called a PMI until you meet the 20%. Consult your loan officer about what is best for you. Note that you will have to make a downpayment regardless (sometimes as low as 3.5%) unless you have a VA loan — so stack up!
Just because you qualify for a large loan doesn’t mean you need to spend it all. Be smart - don’t tie all of your funds up in a home.
Plan to spend money on inspections and appraisals. You’ll need buffer money.
There are various types of loans like VA, FHA, and conventional. I would tell you what they mean, but I want you to look them up!
Once you get your property, get home warranty insurance! Sometimes your realtor can negotiate this into your deal. Choice Warranty is a great option. For a small fee every month ($40 or so), a laundry list of things will be protected. Your HVAC system, septic tank, garage door system, washing machine, and etc. are all covered. It’s the best insurance you can get because something will break!
Central Florida Resources To Consider
Michael Johnson, Premium Properties Real Estate Services, 407.380.2800
Beth Hobart, Mainframe Real Estate, 407.227.8192
Trisha Connell, Century 21, 518.300.6290
Dominic Hall, Equity Prime Mortgage, 407.455.6893
If you have other tips, please drop them in the comments. We are working on getting second home as a rental property, so if you’ve got advice, please share!