Marie and Jason were high school sweethearts. She, was a petite blonde haired, blue eyed southern sweetie and he was a tall strapping ruggedly handsome, dark haired musician. They were both in their early twenties. After their fairy tale wedding came the "living happily ever after" part. Just as they had planned their wedding two years prior, they were now planning to buy their first home.
For two years they had lived off one income, while banking the other. They cut corners to help build up their nest-egg. They bagged lunch, cut coupons, and lived within their means. They entertained at home instead of going out. They carpooled, and planned their errands to save on gas money and most importantly they had two things. A budget and a time frame.
The difference between a dream and goal is a time-frame. They dreamed about finding and buying the perfect home, but they also planned for it. They gave themselves two years to bank as much money as they could to buy their first home. In that time, they had more than enough to put down a down-payment and get their credit up by paying all their bills on time. They lived within the budget they had set after reviewing all of their expenses, and where they could cut some corners comfortably they stuck to their budget.
They drove around on weekends getting a feel for where they thought they might want to buy. They looked at several different neighborhoods before contacting a buyers agent to work with them. They had a very good idea of what they wanted. Three or four bedrooms, two bathrooms, perhaps near water because Jason loved to fish and it needed to be fairly close to the school where Marie was a teacher. Marie had been to the ban and spoken with a loan officer who pre-qualified her so she knew how much home they could afford.
The first house they thought they wanted was a foreclosure. It needed a lot of work. They contacted their bank, and made a loan application. Because they had kept their debt down and paid their bills on time they were easily qualified for a loan that would cover the cost of the house and some improvements. But the bank that owned the property rejected their offer. During that process a home directly across the street became available. It was a little higher, but needed a lot less work. Marie crunched the numbers and realized they could afford it. So they made an offer on that home which was accepted. In planning to buy a home, we advised Marie she would need to factor in closing costs, inspections, and any repairs the home might need. We prioritized the repairs so she could budget for them once they were closed and moved in.
The best advice we can give to couples who are planning to buy their first home is to do as Marie and Jason did.
1) Have a budget and a time frame.
2) Cut all necessary expenses.
3) Cut corners so you can save enough for the down payment, inspections, and closing costs.
4) Get a loan pre-approval before you begin looking so you can narrow down choices which will fit into your budget.
5) Work with a Realtor® who understands your wants and needs, and budget.
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