How I Bought My First Home: a 24-Year-Old Engineer From Maryland

Welcome to Lifehacker’s new series, How I Bought My First Home, where I ask real people about how they actually closed the deal on their first home. This week I spoke with Noah*, a 24-year-old engineer from Maryland.

Buying your first home is an exciting milestone, but it often comes with unexpected obstacles. Home prices are falling in some markets and rising in others. First-time home buyers often face challenges such as limited inventory, rising prices and competition from cash buyers. Here’s my interview with Noah about how this 24-year-old navigated the home buying process for the first time and how you might be able to follow in his footsteps.

First, let’s meet our home buyer.

Here’s what you need to know about Noah:

• Age: 24 years

• Location: Pasadena, Maryland.

• Marital status: Single

• Job/Income: Junior Fire Protection Engineer / $87K.

Now let’s look at the costs of purchasing a home.

Noah shares the cost of his first home:

• Home price: $429,500

• Down payment: 200 thousand dollars.

• Closing costs: $16,200.

• Reserves: no

• Moving: $40 per U-Haul.

• Mortgage payments: $2,079 per month.

• Taxes+Insurance+HOA Fees: $515 per month.

Now for my Q&A with this engineer about the ins and outs of securing his first home in today’s market.

How did you approach budgeting and deciding how much home you could afford?

I was fortunate to receive financial assistance from my parents, who helped me make an above-average down payment of $200,000. With that down payment in mind, I set my home hunting budget at $400-$450K or a maximum loan amount of $250K. This range was affordable for my current salary, including additional costs for insurance, utilities and taxes. To calculate this, I used online tools to roughly estimate what loan size would give me comfortable monthly payments.

What should first-time homebuyers know about mortgages?

Don’t expect the first mortgage offer you get to be the best one. While searching through multiple lenders may seem tedious, especially when your credit score is on the line, it will benefit you in the long run as you are encouraged to shop around before making your final decision. I recommend comparing purchases with at least two, but preferably three, lenders to fully evaluate your options.

How much of your income goes towards your mortgage?

About half of my monthly income goes toward mortgage payments (49%).

What would you do differently?

My biggest regret so far is skipping the pre-closing home inspection. When they offered to buy my house to get a quick deal, I refused to have the house inspected. Although this allowed me to win the home match, it created a number of problems later on. My house was built in 2018, so it’s fairly new; however, within the first few months I identified several items that needed repair, including a broken outside internet line due to landscaping, a faulty dryer, and an air conditioning unit in need of a new evaporator coil and refrigerant. In hindsight, some of these items could have been identified during inspection, which would have saved me time and money in repairing them.

What unforeseen expenses arose?

The only major unexpected costs are related to repairs to the air conditioning system. As mentioned above, a few months after moving I realized that my AC system was no longer blowing cold air. A paid inspection determined that the evaporator coil had multiple holes and that all the refrigerant in the system had leaked. The total cost for the inspection plus a new evaporator coil, refrigerant and labor was about $2,500.

What advice can you give to other first-time buyers?

The top three tips I would recommend to other first-time homebuyers are to make the most of your real estate agent, don’t get emotionally attached, and keep paper copies of important documents:

1. Take the extra time to find a real estate agent who has your best interests in mind. My real estate agent was a huge help in not only finding new properties to view, but also in identifying what I was really looking for throughout this entire process.

2. Don’t get emotionally attached to any house early on. It’s easy to become attached to a property during a tour or open house. There can be a lot of time and competition between the home inspection and closing. Don’t be discouraged if you don’t win the first or even the second offer, just keep looking! There will always be another house for you to win and build your own.

3. Keep paper copies of all documents you receive at closing. While virtual copies are more versatile, it’s still useful to have paper copies for reference, especially to look back on the first few months in your new home. It also provides peace of mind by having an extra set of paperwork if there are any technical issues with your devices.

How long did the home buying process take you, from start to finish?

I first contacted my real estate agent’s team on February 28, 2023. Since then, I contacted my agent, applied for and received a loan, looked at several homes in my preferred cities, and ultimately closed on my home in October. . 13, 2023. In total, the home buying process took me seven to eight months. I admit that I wasn’t very active in looking for a home until August 2023 due to other life distractions, so this time frame may be longer than for someone looking to find and close on a home. Until August 2023, I occasionally reviewed listings submitted virtually by my agent and expressed interest where possible. After August 2023, I became more active in searching listings as well as looking at possible homes to get an idea of ​​what aspects I was looking for and preferred in my ideal home.

*Name has been changed to protect the subject’s anonymity. This interview has been lightly edited for clarity.

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