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Tuesday, October 6, 2015

I bought a house!

                                  (I recently purchased the right half of this four family home)

A few weeks ago I finally closed on my first home! I purchased a duplex in a great neighborhood convenient to all my needs. Purchasing a home can be both exhilarating and terrifying, but with good preparation, good advice and good people on your team anything is possible. Many people asked why I chose to purchase a duplex, and if it meant I was making roots in my current location. I chose to purchase a multifamily property because of the income potential, having rental income frees up my cash flow and allows me to build equity. Purchasing a rental income also gives me the freedom to stay or leave as I please, because the unit is meant to be rented. When or if I want to leave my current location, I can rent a two bed, two bath apartment quicker than a house. Everyone has their own reasons and needs when it comes to purchasing a property, however some things remain the same across the board. Below I'll list a few things I learned before, during and after my home buying process.

  1. SAVE, SAVE, SAVE! 
If you have any interest in purchasing a home, save up your money! I personally saved a good amount of money, but I chose to take a loan from my retirement plan to make my down payment. I wanted to keep money fluid in the event something happened, or I needed more last minute. As I learned at closing, I needed more last minute. There will always be a last minute expense, something will always pop up. If your lender says you need 10,000 for closing, keep at least an extra 5,000 in the stash. You will write some of the biggest checks in your life during this process so have MONEY!

     2.DECIDE WHICH TYPE PROPERTY YOU WANT

Depending on where you are in life, and your aspirations, different properties may suit your need. Everyone doesn't aspire to be a landlord or worry about tending to a property. Condos are great for people who want to build equity and don't want the worry of maintenance. With condos you will have association fees, but all of your maintenance should be covered by those fees. Single family homes are great for families, or single people who don't mind taking care of their own maintenance. Multifamily homes are great for those who seek to free up cash-flow, and don't mind handling maintenance and tenants. Within those categories there are several variations, once you've decided which path you want to take you can explore the options. 

    3. KNOW YOUR CREDIT SCORE

Knowing your credit capabilities are as important if not more important than saving money. While you are saving, its important to find out your score and either take steps to improve your score, or ensure you maintain or raise your score. Credit is very, very, very important, if you know you need help building credit there are many free counseling organizations sponsored by your state. Be careful with dealing with organizations you've "googled", many of them will try to get you to close and consolidate your credit, when in fact closing credit can hurt you more than help. Talk to your friends and family, especially those who own a home for tips and advice as well.

   4. ORGANIZE YOUR DOCUMENTS

You will need errythang! You're going to need at the very least recent pay stubs, two years past W-2's, two years past tax returns, all bank statements including the blank pages. Depending on what type of program you use, you will need a lot more or a little more. You will also need to write letters of explanation on certain items that may be a trigger for your lender. As far as lenders are concerned you've got to be Mother Theresa to get financed. Some examples of reasons you will be asked to write a letter are multiple addresses on a credit report and explaining an account for which you are an authorized user.

   5. DO YOUR RESEARCH

More than likely you will find the property you purchase, realtors help but no one knows what you want like you. If you want to find your dream home you need to know what you want, start driving around your desired neighborhoods and making lists. Inform your realtor of the properties you want to see and they will schedule a viewing. I always encourage driving around a house/neighborhood after school/work hours and on weekends if possible. I could've saved myself a lot of time viewing homes I knew I wasn't going to buy, had I checked out the neighborhood beforehand. Also, be diligent in looking into any and all programs you may qualify for. As a first time home buyer or veteran, there are programs in nearly every state to assist you in the process. States offer assistance from counseling, to down payment assistance and tax incentives. Utilizing state programs may lengthen the process slightly, but overall for what you save it can be very well worth it.


At the end of the day, at some point in life it will behoove you to purchase property. Renting for a lifetime will never be a financial benefit to anyone but the landlord. Know what you can afford and make smart decisions, but make the decision. Purchasing property can be intimidating, but the hardest part of home ownership is getting over the fear of home ownership. If you are prepared and make smart choices it will be a fairly easy process. Home buying is definitely a practice in patience, organization and signing your name about a thousand times. I am by no means a professional in real estate, but I am an encourager of  creating financial independence. If you have any questions, please comment below or email us. I may not have the answer, but I will most certainly try to find it for you! Create a great day, and buy a house!

Peace, Love and Light!
Amira 


7 comments:

  1. Awesome article!!! Congratulations on becoming a home owner. Home ownership and cash flow is essential to creating weath. Especially in communities of color.

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  2. Congratulations on buying a house! What an awesome accomplishment. Im still on the saving stage, and trying to save as much as I can before I start on the other steps. Great post though

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    1. Yes saving was one of the most important steps because you never know when something else would pop up. Glad you enjoyed!

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  3. Excellent advice! I G+'d it. :)

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  4. Two things I have to agree with—First, you need to start saving more money than you think that you will need. Second, start fixing your credit now because it will affect how much money you pay to close. We got our credit number up 100 points by closing and it saved me over $3000 in interest over the years for a little work.

    Mattie @ Buyer's Corner Realty

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  5. I’m glad you now have a house and a duplex; sounds great for your needs! I appreciate all your advice on purchasing a home; each step is truly important, especially the part that says knowing your credit score. You make such a great point by bringing that up. Thanks again and enjoy your new home very much!

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