The Home Buying Process with Garrett & Jill
This episode of Financially Naked: Stories from The Financial Gym is hosted by Garrett and Jill, two Certified Financial Trainers. Today's conversation is all about the home-buying process. Jill has an insider's perspective as a mortgage broker, and Garrett recently bought a home! They discuss Garrett's experience and the lessons he learned that can be applied to anyone starting this process. Purchasing a home is an amazing accomplishment, but the process can be tedious. If owning a home is one of your goals, this episode will help you prepare.
Podcast Notes
Growing up in Southern California, Garrett has been a lifelong renter. One of his long-term goals has always been to buy a home. His partner spent time living in Nevada, so when they started looking for homes, they were open to moving out of state.
There are many benefits to shopping locally, but for Garrett's budget, Nevada had more options. They were fortunate because of his partner's connections in the area.
You want to surround yourself with people you trust. Ask your friends and family for referrals. They worked with an exceptional real estate agent who made shopping out of state less stressful.
After the realtor sent them videos, his partner would travel to look at houses they were seriously interested in. She would stay with friends and try to see a few places each time she visited. If you can't visit in person, having a friend or family member look on your behalf can be a great resource.
Benefits of Owning a Home
One of the biggest benefits of home ownership is the opportunity to build wealth. As you pay the mortgage each month, a portion of that goes towards the principal balance, increasing your equity (the value you own) in the property.
Historically, real estate tends to appreciate in value in the long term. Even through down periods in the market, the value of your home will likely increase over time, which can add to your wealth over the years.
Homeownership also comes with tax benefits. Mortgage interest payments and property taxes are often deductible from federal income taxes, which can lower your tax responsibility.
Owning a home comes with stability and predictability. You can plan to live there long-term and truly make the space your own. Fixed-rate mortgages provide predictability with housing costs, making it easier to budget and prepare for the future.
Your home is an asset that can be used for other financial goals. You can borrow against the equity in your home through a home equity loan or line of credit to fund major expenses.
There are costs associated with home ownership that you need to plan for, which you do not if you're a renter. These can range from minor repairs to larger expenses like replacing a water heater or fixing your roof. Things will go wrong in your home, so it's important to plan for them financially.
Preparing to Buy a Home
If you want to buy a home, get comfortable with budgeting and saving. Purchasing a home can require a lot of cash up front, so saving is one of the most important ways to prepare.
Websites like Zillow and Redfin can help you understand the price range of homes in certain areas. This can help you determine whether you can afford to buy a place in your current location or if you may need to consider moving to a different area.
Your first home does not have to be your forever home. The first property is always the most challenging to get into. Once you own a home, you have more leverage to buy something else.
There are professionals in the industry, like real estate agents and mortgage brokers, who can make the process much easier. The key is to find people you trust and feel comfortable asking questions. Your realtor will likely have vendors and brokers they work with regularly, which can streamline the process.
Once you have decided on a home and put in an offer, closing takes several weeks. This is because inspections take time, and the lender will want to verify quite a bit of your financial information before officially approving the loan.
Final Thoughts
The best time to buy a home is when you're ready financially. The market will always fluctuate, so don't let interest rates solely dictate your decision.
If owning a home is one of your goals, don't let the process or the cost intimidate you. There are affordable homes out there, but you may have to get a little bit creative to make it happen.
No house will be perfect. Be willing to compromise. Determine what is the most important to you so you can search and shop with clarity. Be open to other possibilities, like moving to a lower-cost area.
After you purchase the home, you will likely want to do work or make improvements when you move in. You will also need to plan for the actual move once the house is purchased. When saving to buy a home, remember to add those costs to the plan.
If you want to work with a Certified Financial Trainer to help you plan to buy a home, schedule a free warm-up call today! If you have any ideas or questions for the show, send an email to trainerpodcast@fingyms.com.
Resources
Meet The Trainers
Meet Garrett Faulconor, Certified Financial Trainer
Meet Jill Wagner, Certified Financial Trainer, Licensed Mortgage Broker
Company name: Mortgage Trust (and/or Mortgage T in AL, FL, MN, NC, SD, TX, and UT)
Company license number: NMLS 3250
Loan officer name: Jill Wagner
Loan originator license number: 2479786