Buying Your First Home

Aside

Ah! The American dream of owning your own home. It’s exciting, stressful, and rewarding all at the same time. At the age of 25, I just bought my first home with my boyfriend and we are so excited to finally have a place of our own. After renting a 700 sq ft- 3rd floor apartment for two and a half years, we decided to put our money for renting a bigger apartment towards our first home. We felt it was a smarter decision really since the price of just renting a 2/2 apartment is the same as mortgage, and we are at least investing in ourselves and our future.

However, when buying your first home, you don’t realize the how long and stressful the process is. Not to mention all of the unforeseen expenses that come with it! I decided I wanted to write a blog about our experience and hopefully give some helpful tips for other first time home buyers.

First step to buying a house, is getting a pre-approved. BUT I want to tell you my first step. Do your research on what is involved in buying a home. There are a lot of upfront expenses that you don’t take accounted for. When you’re young like us, you think you just need a 3.5% down payment for an FHA loan and you’re golden. WRONG! So, my first step is budgeting your money and making sure you have enough saved and then some before you even start looking at houses (to not kill your dream later on!).

What are these other costs you ask? Well, I’ll be happy to tell you since no one told us when we went to buy our house. On top of a down payment for the house, you need to pay for an inspection, appraisal, closing costs, and a homeowners premium which all will be explained more later.

So after the first step of doing your research and making sure you have enough money to buy a home, find a mortgage broker to get pre-approved. I wouldn’t find just any mortgage broker. Ask your friends and family who they have used in the past. You are going to be working with this person for the next few months, so find someone trustworthy, experienced, and has a good attitude! The first mortgage broker I sent my information to, gave me the highest amount we were pre-approved for. However, they failed to go over what I am looking to pay on monthly basis (mortgage). So for a month, I was looking at houses WAY over my budget! Luckily, the realtor I was working with had us get our stuff reviewed by their mortgage broker who they refer, who did a way better job of explaining what we were getting ourselves into. He took what we wanted to spend on monthly basis, and gave us the amount we should be looking for. It was about a $60k difference! You may be pre-approved for a lot, but you want to make sure you can actually pay your mortgage.

Real quick: what is included in your mortgage. If you have escrowed (combined all expenses) into your mortage, you will be paying for your mortgage, mortgage insurance (FHA Loan), property taxes, homeowners insurance, and interest. If there is any HOA or dues for the community you purchase in, that will be a separate from your mortgage.

Once you have a better understanding of your estimated mortgage, it’s time to find your dream home, or dream starter home! Work with a relaxed realtor who wants to work for you. I’ve met many realtors who are just so anxious to sell you a home that they don’t take the time to care about what you want. My realtor was fantastic and patient with us! Searching for a home might be a whole other blog, but all I can say now is have patience.

Once you find a home you LOVE (I capitalize LOVE because this is a big investment, so make sure you LOVE it!), you need to put down a deposit to hold the house, or put it “under contract”. Deposit amounts will be given to you by your realtor and they vary on the price of the house. There are generally two deposits, or the rest of the down payment is owed at closing. The entire buying process takes about 45 days from the time your offer on the house is accepted to your closing date- the day the house is yours.

After the deposit has been made, you need to set up an inspection which can be around $500+. An inspection includes an overall inspection of the house, your 4 point inspection, wind mitigation, and termite report. The inspector will give you a general idea of the condition of the house so you know what to look for in the future expenses wise- such as a new roof, or AC unit. They test everything in the house- water, appliances, electricity, roof, windows, etc.

Shortly after the inspection, your mortgage broker will work on getting the house appraised which will costs you another $500+. The appraisal will tell you how much your house is worth. Once the appraisal comes back more than what you are taking a loan for, you can begin looking at home owners insurance.

Your mortgage broker can recommend some companies for you, or you can research on your own. The house is your new baby, and ANYTHING can happen, so as expensive as insurance can be-make sure you’re covered! Living in South Florida, we have to have hurricane coverage, but flood coverage is separate. As tropical as it can be here, we also have what feels like monsoon season where it just rains every single day. When you select a homeowners insurer, you have to pay a premium which is generally the amount of a full year of insurance. We definitely were not expecting this in our budget plan! This amount is usually due before closing, and most insurance companies will offer a payment plan for the premium.

Now it’s time for closing costs! Your closing costs are generally 2-5% of the purchase price. Closing costs can be negotiated with the seller to where they pay for half of the costs, or more. Remember the realtor works for you, so it’s best to be completely honest with them as far as finances go. We told our mortgage broker and realtor that we did not have money for closing costs, so we would have to find a seller willing to negotiate with us. Luckily, when we finally agreed on a house, we ended up negotiating with the seller to pay all of the closings costs upfront and raise the listing price so that we pay it back with our mortgage. To keep your mortgage low though, I would highly suggest having the money for closing costs!

Now you have closed on your house, the keys are in your hands, and you are officially a homeowner. Whatever you just spent to get the house, expect to pay more! If there are any renovations, appliances needed, furniture, decoration- it all adds up!

We were very excited to jump on the homeowner train fast, but knowing the process and what is REALLY involved in buying a home would have helped us out more. While I had a few home buying lessons throughout the blog, here are some tips I would give to others:

  1. BE PATIENT! Especially if you are buying a home with a partner. While you’re going to be disappointed and disagree a lot, it’s best to find a home you both love together. (P.S. I wasn’t kidding about the disappointment- you get sad a lot!).
  2. Save, save, and save! Owning a home is no joke. Things break, and they are expensive! Always be prepared for the worst, especially if you are looking at older homes.
  3. Budget your bills correctly, and try not to go over budget. Many people think that they can afford more, but that’s how they get into debt trouble! The right house will come along, but you have to -again- be patient.
  4. Don’t be afraid to say no. It’s your house and your money! Don’t settle for anything less than you want to. The house we purchased was the one, but there was a big issue with the AC unit. In the span of a week, the AC broke twice, and it was old. We had a family friend come check out the unit, and they said to expect a whole new unit with ducts in the next year or two. The seller refused to put in a new AC unit because their AC guy said there was nothing wrong with it. This was a big deal breaker for us because the price of a new AC unit was going to costs us around $4000! That’s a lot of ca-ching for a young couple. The realtor bought us, from his own pocket, a one year warranty on the AC if anything else breaks in the unit to make sure we had some time to save up. So, don’t be afraid to voice your concerns because there is always something that can be done- or it’s just not worth it.

I hope that this blog helps someone buying their first home! I’d love to hear from others who have tips or experiences to share when they purchased their first home.

-B.

Tips for Choosing Your Dream Job

 

2016-01-7--22-33-58

Choosing a career is one of the toughest decisions to make in life. Depending on the career road you take, your spending a lot of time, money, and effort to land that dream job. Many decent paying jobs requires a college degree along with the experience to match it. But who knew there were so many majors, jobs, and different careers out there?

When I first started college, so many different majors and job titles went through my mind. I was constantly researching about what was required to be hired, how much money they made, and how much schooling I have to complete. Then after researching one career path, I would run across another type of career I had no idea even existed!

After thoroughly researching just about every possible major and career there is to offer throughout the years, I could basically be the lead writer for bls.gov (Bureau of Labor Statistics). But from working different jobs, and taking so many courses in college, how do you choose what to do for the rest of your life? Especially, when you have to pay student loans afterwards. I pretty much ruled out hospitality, being a teacher, and customer service.

However, the grand thing about life is that no matter what age you are, you can have any job that you want. There’s no age limit in going back to school, or trying something new. Working full time, you spend a minimum of 1,920 hours a year at your job. So, shouldn’t we do something that we thoroughly enjoy so that we really aren’t working as they say?

With all of that being said, here are some questions I have asked myself…

For anyone looking to change careers or just starting college is to take a look at what makes you happy. Do you like making things? Are you creative? Like budgeting or giving advice? In today’s world, we can do absolutely anything that we want. Between technology and the desire to be happy, even new careers can be created. Take a look at blogging for instance! Who knew that people writing about what they loved could give them a full time income?

Who do you want to work for, or with? I think this is a very important thing to factor in your decision. Sometimes the office or corporate life isn’t for everyone (including me!). From previous positions I’ve worked in, I have learned exactly who I do not want to work for, or certain people I don’t want to work with. Therefore, I came to the conclusion that I just want to work for myself! I’m a people person, and can be very social. However, when it comes to work, I take myself seriously and like to prove to others my worth. Sometimes you just need to value yourself, and not let others value you.

In conjunction with who do you want to work for is, where do you want to work? Are you more of an outdoorsy person? Like the idea of being in a warehouse, or a school? I actually prefer the comfort of working from my home. I don’t have any kids, but I do know that I hate driving and some days getting dressed. I know for a fact that I am always late to every place I have to be, so working from home helps a lot with my reliability and attendance! Just remember that you are spending majority of your life at this type of location, so make sure you’re comfortable wherever you are working.

Salary– while in fairy tale land, money shouldn’t succeed happiness. But in the real world, we do need a certain amount of income to survive. It is best to look at your finances, and calculate how much money you need on a monthly basis when looking for a job or career path. If money isn’t your concern, make sure that your not going over your budget. While the idea of no bills is ideal, we do tend to spend more than we make. The last thing you want is work to work two jobs. If you’re young, try to get an idea of what you want your life to be like in 5-10 years (consider entry-level pay). Do you want a house, kids, to travel the world? Find a figure that you think would suffice to your happiness.

The last tip, or question really to ask yourself is what do you have to do to get that dream job? Sometimes we do have to sacrifice a lot to do what we want or have the things we have, but we always have to be careful that we aren’t putting ourselves in a predicament. For instance, when I started college I wanted to get my degree in sports recreation. I loved planning activities, being involved with sports, and coordinating. However, the degree I needed required 2 semesters of 450+ hours of internship. With rent, a car payment, and all my other bills- I just couldn’t afford to not work full time! If you’re lucky enough to go to school debt free and without having to work, this question may be a bit easier. But being in the technology era, online schools and classes have made it much easier to choose any type of field to study.

It may only be a few questions to ask yourself, but they’re pretty tough questions to consider. Being only 25 years old, I still find it hard to choose a major to get my degree in. No, I haven’t finished college because I’m still deciding what I want to be when I grow up.  Some jobs don’t require a degree, or a certain type of experience. Now, you can make money blogging, reselling antique items on ebay, or give old furniture a nice makeover for profits. People make big bucks running social media accounts, taking pictures, or selling t-shirts. Either path you decide to take, just make sure that it will make you happy and help fulfill your future.

After asking myself these questions, I thought that accounting would be the most appropriate for me. Many say accounting is boring, but I love to budget- I love knowing how to make money- there will always be enough jobs-  I have the chance to work remotely- and the salary is decent enough to help raise a family (even part-time!). No, it’s not my dream job, but at least I would know where to start when I decide to run my own business!

Hope my tips and questions help you with your decisions! What made you decide to choose your career path?

-B.