This young man from Idaho had a goal: buy a home. After getting tired of paying rent, Quade decided he was going to do something about it. After educating himself about the home buying process, he got in touch with a unicorn team who showed him that he was qualified for way more than he thought, eventually leading him to his very first home at 20 years old!
Here are some takeaways from today’s conversation:
- Paying forwards vs. paying backwards
- Tools to help you budget wisely
- Possibilities with home equity loans
- Don’t get caught up in the increased monthly payment
[01:25] How It All Started
Quade had always been interested in finances and loved to listen to financial podcasts at work. After getting sick of paying rent and watching the money go down the proverbial “drain,” he decided it was time to see if he could buy a home. After getting in touch with a unicorn team, he was approved and purchased his first home within a few weeks, even though he was still paying rent. Quade knew it was worth it to “double pay” because having a mortgage meant more value than paying on a lease, so he followed a well-planned budget to save up for the 3% down payment and closing costs. Also, it made sense because paying rent, you pay ahead for your month, but with a mortgage, you pay backward for the previous month. This can give renters-turned-owners some breathing room.
[20:30] Homeowner at 20
The average age of first-time homeowners in the US is 36 years old, so Quade is ahead of the game! He purchased an older home that he can renovate and resell, hopefully giving him a boost into the real estate industry that he’d like to get into. He didn’t need to spend too much time finding the right neighborhood because he knew exactly where he wanted to be, so his unicorn team helped him prepare financially to be able to get into it.
[32:12] Don’t Get Caught Up in the Expenses
Instead of being afraid about the expenses associated with buying a house, listen to David. If you are paying for rent and also looking to save, it might be helpful to change your perspective on how this really works. You aren’t taking on a new payment, necessarily. You’re replacing a monthly payment for a different type. By paying for a mortgage, even an increased one, you’re really combining your old rent payment and old savings payment.