How I bought a house at 23

How I Bought a House at 23 Years Young

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FACT: My credit score was good

I started working when I was 15 years old, so I’ve been managing my own money for a while now. It was completely unacceptable for me to have a late payment on anything, so I held strong on that. Don’t get me wrong, I still had fun, spent money, ate out, bought clothes, and lived life down to my last dime in college but never did I let myself not pay my own bills. This mindset has allowed me to have a pretty great credit score. This certainly helped when I decided to buy a house.

When I got my first brand new car 7 years ago, my parents named me as a co-signer. This helped to start building my credit. Then in college, I got a credit card to my favorite clothing store (which I do, and don’t, recommend). It took A LOT of self-control. This too helped build my credit. I always gave myself a certain dollar amount I could spend and never went over that to make sure I could pay it off.

MYTH: You Need 20% Down

Not true! This is one of the biggest real estate myths. You do not need to have 20% down to buy a home. Granted, it is super helpful and awesome if you do – but there are ways to do it without that. Since I apparently liked to live life paycheck to paycheck, this left me with very little savings.Luckily, the town I wanted to buy a house in qualified for something called an RD (rural development) Loan. This loan allows you to buy with 0% down! I literally bought my house (not including inspections) for just over $500 out of pocket. (Click here if you want to learn more about USDA loans and the benefits of other loans offered.)

MYTH: You Have To Have Zero Debt!

This is also not true! Remember me mentioning buying a car, having a credit card, and going to college? Yep, that stuff adds up. I did have a good amount of debt to my name so that was my first obstacle; I had too much. How I resolved it may not be an option for everyone, but luckily it was for me. I had a boyfriend who was going to be living with me so he “bought” my car from me and released my name from that debt. Like I said! Not an option for everyone…maybe it could be a parent or family member? And for those thinking I’m absolutely crazy for letting my boyfriend buy my car from me, we’re happily engaged now

 

FACT: My house only cost $105,000

I did not go and buy a $150,000 house or a mansion. I bought the perfect little starter home. 3 beds, 2 baths, around 1,100 square feet in the growing city of Le Roy. You don’t need to go big on your first home! Just get what you need and start building equity. It’s only your first home

FACT: I was prepared and organized

You must, must, must find yourself a trustworthy, reliable, local lender. Mine walked me through every step and helped me stay true to the monthly mortgage I wanted to spend. I shouldn’t even say wanted, more like should spend. Your lender should be like your personal finance coach. Mine looked at the current monthly bills I had and helped me realize I don’t want to be house poor (ya know, have a house but not afford to put anything in it or keep it maintained), so we found a good monthly mortgage cost that would still allow me to live my current lifestyle.  These conversations left me feeling prepared and confident in my home search.

The final item that helped me buy my first home at a young age was being organized. I was ready to go with all the documents my lender needed when I went to apply for a mortgage – two years of W2s or 1099s, two years of tax returns, two or three most recent pay stubs, two or three months of any/all bank statements. If you’ve got that, you’re ready to go! Now, who is ready to buy their first house?!

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