Saturday, June 8, 2013

The Slow Lane Path to Home Onwership

All of my adult life I have wanted to own my own home. I briefly did, back in the early nineties when I was still married. But when we split up the house had to be sold. I've been renting and/or house sharing with others ever since.

Breaking back into home ownership has been an uphill battle, with lots of barriers to success. To begin with I happen to live in one of the most expensive housing markets in the state, if not the entire country (In 2012 the median price of homes here was a whopping $350,000). I live on a modest income and the cost of living here is high, so saving towards a down payment has been difficult. Whenever I would manage to build up some savings, like clockwork some disaster (usually kid or auto related) would come along and wipe me out again. Single parenting and chronic underemployment left more than a few dings in my credit rating along the way as well.

So with all this working against me what the heck makes me think I'm going to finally buy a home three years from now? Simply this: The facts of my situation haven't changed, but my attitude and expectations have. Namely, I've done the following:

Put it on the Calendar:
There is a huge difference between owning a home "someday" and owning a home "three years from now." By giving myself a firm deadline I created a sense of urgency around doing the things I need to do to make it happen.

Manage Expectations:
For years I had this rosy image in my mind of myself and my son living in a house with a yard and a swing set in a good school district. When my son turned twenty and grew a goatee, I realized it was probably time to revise my vision of success. I'm now open to the idea that a less costly condo in a more affordable area might turn out to be more my speed.

Repair Past Damage:
Considering I'm a one income household, and said income is modest at best, I'm going to need my credit rating to be as good as it possibly can be to get a mortgage. In my case some old medical bills, late car payments and a charged off credit card are the culprits bringing down my FICO score. Over the past several years I've been slowly paying these debts off, but the negative information will remain on my report for a full seven years. I can't do anything about that, but I can use the time wisely by creating new positive history by means of a secured credit card. By the time I am ready to apply for a mortgage most of the negative history will have fallen off my report and, hopefully, my hard work raising my score will have paid off as well.

Commit to Saving:
When I was a teenager my auto insurance agent gave me some good advice: pay yourself first. What this means is don't wait for a windfall to put money in savings. Put something into savings right away out of each paycheck, no matter how little, and resolve not to touch it. If I can save just $150 a month, I'll have $5,400 to put towards a down payment three years from now. Some months hopefully I can save more, others it may be less. The important thing is making adding to my savings my first financial priority every month.

Set Better Boundaries:
I have a tendency to sometimes put too much into helping others, at the expense of what I need for my own well being. I need to enforce my boundaries better, even if sometimes it might mean saying "no" a little more often than I'd like. This might sound easy, but I suspect it will be the hardest change to make.

Most of these things are not big, difficult changes, but I hope that by embracing them I will see a big payoff when I eventually reach my goal. After all, slow and steady wins the race, especially here in the Slow Lane.

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