Thread by @finance_fridays

Growing up in an apartment on #Section8 , it escaped my grasp that I could purchase a house before 30. Here’s what I learned buying a house at 26 years old (a thread).

•You don’t need a ton of money.

Let me backtrack for a second. Market price for a house will vary depending on the area you’re looking to buy in, the size of the house, and the SOLD (not sale) prices of houses in the area (same street/same block) within a recent 3-6 months.

• You can purchase a property for a fraction of the cost by using a federally backed loan called “FHA”. You put down 3.5% of the purchase price (+ closing costs) and you can walk away with a new mortgage.

What did that look like for me?
Purchase price $165,000
Down payment $5775
Closing costs (seller paid via negotiations) I happened to find a motivated seller who needed to sell the property as part of an estate. This made negotiating much easier.

• Buy within your means. When I got prequalified to buy a house the lender told me I qualified for up to $250k. Qualifying for a $250k loan and being able to pay on a $250k loan are two different things. Buying a house requires self awareness of your financial situation.

•It’s good to have cash reserves, but you don’t necessarily need to spend YOUR cash. I borrowed from my employer sponsored 401k to show I had the money needed to put down on the house, but I walked away from the closing table having put my downpayment on a credit card! How?

I took advantage of a 0% balance transfer offer on one of my credit cards and deposited the cash into my account. That way I could take advantage of deferred interest charges AND keep my downpayment. This method should be reserved for only the disciplined. (Not advice!)

Some additional expenses/fees may include :

•inspection
•appraisal
•closing costs*
•earnest money (a deposit on the contract to demonstrate your intent to buy)
•Title search/attorney fees
•Lender fees (credit pull/loan origination)
•Radon testing

Things to consider

•Avoid hard credit pulls during the process if possible
•Keep you debt low
•Make friends with your lender and realtor
•Be prepared to walk away from a deal that doesn’t make sense
•Don’t fall in love with the property until you close

Additional resources :

Hud.com
Fha.com
Zillow.com
Trulia.com
Rahkimsabree.com

Ps... a zestimate is NOT always accurate but it’s a good place to start. ;)

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If I can get @TheEllenShow to retweet this I might just cry. Imagine all her followers being given hope that they can control their financial future! 😭

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