Buying Your First Home

Low interest rates, which are currently well below 3%, have motivated countless first-time buyers to take this opportunity to pursue a property of their own. Mortgage payments are now hovering at or below what you would be paying in market rent for a 3 Bed, 2 Bath, 1,500 square foot house in the $350,000 range. These low rates and resulting low mortgage payments won’t last forever, but they are projected to maintain at the current rates for the next several months.

A fringe benefit of these low rates is the multitude of feel-good transactions I’ve been a part of this year. A career in real estate, while stressful at times, is incredibly rewarding. First-time buyers, move-up buyers, first-time investors, and first-time sellers are just some of the clients I’ve had the pleasure of working with this year. Win-win situations are the norm, and it feels great to be a part of these deals getting done.

I just closed one such deal where I was able to help the son of long-time friends purchase his first home. It took a while for Tony to find that perfect home, and the uncertainty of covid-19 caused a significant pause to our search. But as real estate showed itself as one of the few bright spots of 2020, and as interest rates crept lower and lower, Tony let me know he was ready to refocus on his home search. Tony found himself a cute 3 bed, 1 bath home in the neighborhood of Colonial Village for $270,000.

Tony had a very impressive and disciplined approach to purchasing his first home. He minimized his expenses by continuing to share a room with his brother in their parent’s 2 bedroom home after graduating from high school. He dedicated himself to saving large portions of his paycheck towards the purchase of his first home. He kept his debt balance at zero by not keeping a credit card balance, and by purchasing his first new car with cash. He indulged himself with an occasional craft beer or a fine wine, but he never spent frivolously. He accomplished all of this with his single income as a custodian with the Sacramento City Unified School District and did so with one of the most positive and magnetic personalities that you’ll ever meet.

At the end of Tony’s first real estate purchase, he has a mortgage payment well below what he’d be paying in rent for the exact same house. He will build wealth and sweat equity with every improvement he chooses to implement at his new home. And he has started his investment snowball with this first purchase as he’ll be able to move on to another home in a few years while keeping his first home as an income producing investment property.

Real estate is a cornerstone of wealth building. Having your monthly house payment go towards your own equity opposed to someone else’s through rent is a key component of that wealth building. With interest rates being at all-time lows, it is allowing more and more people to take advantage and become home owners. This in turn has allowed me to be a part of many feel-good transactions like Tony’s and it feels very rewarding. Reach out to me with questions or comments as I’m happy to help.