Purchasing a house isn’t a small thing to jump into. It’s one of the biggest purchases we’ll probably ever make and it will continue to accrue expenses (no landlords to fix anything). We’ve had a number in mind for our savings before we ever started looking. Billy would be in charge of the down payment and I would contribute by purchasing furniture.
We’re also big mint.com users. If you haven’t heard of it before, it’s a really a great tool. Mint shows all your accounts, balances and transactions in one place and categorizes them. You can also set up goals. For example, a goal to buy a house, pay off student loans, travel, etc. Mint’s features easily show you how much money you spend on food, gas and any other categories that month.
I mentioned that we housesat together; this was a good test to see how much we consumed in groceries. Since we lived with our parents for the last year we didn’t have an accurate take on what we were spending on food. But in those months we were able to see what we were spending normally, aka we didn’t go out of our way to be cheap. Despite our lack of budgeting, we were surprised to find we didn’t go out frequently—something we attributed to being content in our own space.
The first step to buying a house is shopping for a mortgage. Which means considering all of the above expenses, plus any outstanding debts. We still want to make progress in our debt reduction, but we also want to have a more balanced approach to it.
Billy handled the mortgage shopping. I wanted to go with a credit union like BECU but their interest rates for FHA were surprisingly high. Billy ended up going on a site and submitting some of our information for a quote. This was not the best idea. We were getting phone calls for weeks from banks. Not fun. But we did find a bank nearby and our broker was able to give us an unbelievable rate. SCORE.
We ended up pre-qualifying for a mortgage of up to $200,000. Now for the fun part: house shopping.
Other posts – How to Buy a House: Our Story
Definitely sounds like a long and somewhat draining process. I'm sure finances are the biggest challenge to tackle in the home buying process. Love all the insight you're providing in these posts – super help! Wishing you guys the best of luck! I know you'll find the perfect little place to fix up and call your own!
I haven't yet dipped my toes in the property market but I will definitely be bookmarking this post for when I eventually do. The prospect of owning your own place must be so exciting..you can drill holes in the wall and put up picture hooks wherever you want and have a mini zoo as pets and no one can complain 🙂 PS: I'm a sucker for pretty things and your blog truly is full of them…I'm off to snoop through the archives 🙂