How We Bought Our First Home: Youth Pastor and Graphic Designer From Ohio

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 Sam*, a youth pastor from Ohio.

Earlier this month , I told how a 24-year-old from Maryland bought his first home , and before reading the article, most readers knew about the main thing: help from parents. I know – this is how these articles are usually written. That’s why I’m grateful to those of you who shared how you were able to buy a home without generational wealth. Here’s my interview with Sam about him and his wife Julia*, how the couple navigated the home buying process for the first time, and how you might be able to follow in their footsteps.

First, let’s meet our home buyer.

Here’s what you need to know about Sam and Julia:

• Age: 32 years (Sam); 31 years old (Julia)

• Location: Cincinnati, Ohio

• Marital status: Married

• Job/Income: Youth Pastor, $55K (Sam); graphic designer, $60 thousand (Julia)

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

Sam shares the cost of his first home:

• Home price: $158,000.

• Down payment: $4,700.

• Closing costs: $4,400 ($3,500 paid by seller).

• Reserves: $20,000 (including emergency and repair funds).

• Moving: $114 (U-Haul and accessories)

• Mortgage payments: $944 per month.

• Insurance/Taxes: $243.00.

• Total monthly payment: $1,187.

• Loan term: 30 years.

• Interest rates: 6.25%

And now for my Q&A with Sam about the ins and outs of purchasing his first home in the current market.

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

We had been renting for the past two years and wanted to find something more stable as rent continued to rise. We currently have two incomes, but my wife wants to go part-time (or full-time when we start a family). With that in mind, we tried to base it on my salary with some flexibility, staying within 30% of my salary where possible. It cost us about $180,000 at our top home price.

What should first-time homebuyers know about mortgages?

Take a closer look at the prices. This is potentially the biggest financial decision of your life, so make sure you get the best deal possible. Even if it impacts your credit score, you’ll potentially pay it off within the next 30 years, so make sure it makes a difference.

Don’t forget about your local credit unions ! We found a rate that beats national lenders by 0.5%, saving us $200-$300 a month. They offered a very competitive PMI of $31 per month since we knew we couldn’t lower the price by 20%. Credit unions are much more likely to keep your mortgage (national lenders may transfer your mortgage from company to company), and you can’t beat their personalized service. We ended up opening an HSA account with them because they were easy to work with.

How much of your income goes towards your mortgage?

With two full-time jobs, we have 15%, although we know this may change in the future.

What unforeseen expenses arose?

We came up with a few things along the way. We had to completely rewire the house, which we were aware of. My father, a retired electrician, was fortunately able to help with most of this work. Unfortunately, we ran into one part that he wasn’t comfortable doing and that was an unexpected $4,000.

We also used IKEA to purchase new kitchen cabinets to save some money. When it arrived in 70 boxes—literally 70 boxes—we knew we couldn’t put them together in a reasonable amount of time. It was an additional $3500 that we negotiated with the IKEA installer. We had to take out an additional loan, but the time saved (and the inevitable tears) was worth it.

What would you do differently?

I looked at a few different first-time homebuyer grants offered by the state of Ohio, but I was too far along in the lending process to fully check them out. If I had a second chance, I would look into how they work in more detail.

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

Look at the house as it could become, not what it is now. Smelly carpets can be replaced. The floors can be repainted. If you’re willing to watch a few YouTube videos and talk to your local hardware store, most things can be repaired in your home. I learned how to install baseboards, remove a curtain wall (with the help of friends), replace a toilet, and more.

Find the best realtor you can. We literally would not have bought the house without their help. At the end of 2023, homes were listed and sold in about 48 hours, and at our price, we often encountered investors offering cash. We wrote personalized letters and attached them to our offers, but I’m not sure how much that helped compared to a cash offer. Our realtor managed to contact an investor who decided not to rent out the house, but to sell it to us at a premium for him, but within our price range. He was also able to negotiate for the investor to complete a few updates to the house so we wouldn’t have to do them.

One tip from our Realtor: Take the PDF of your home inspection and write down all the individual issues listed, then rank them from most pressing to least pressing. Now you have a list of your super fun home improvement projects for the next five years.

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

We started looking with our realtor in September 2023. After placing six offers on different houses, not to mention three or four that had all-cash offers before we could even make an attempt, we closed on our house in January 2024.

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

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