The memory of buying your first home will stay in your memory for life. For me it was even more special, since I bought my first home in the States when I was just a student.
Many of us, at the ripe age of 25 and below are still trying hard to make ends meet, while simultaneously paying back the coin we’ve sunk into our education. Not to mention, being a student is hard work. Really hard work. Deadline after deadline, exam after exam. So many places to be, and fires to put out!
How then, does one in this position find the resources to become a homeowner?
I have been there. As someone who’s navigated the standard-issue hardships of student-hood plus some more. I’m here to share my journey with you.
I am here to share how I bought my first home as a 3rd year immigrant student, and 17 more in last 3 years.
First, some of the major hurdles I faced…
Hurdle #1: Lending Restrictions
Like many others, I went through the whole nine yards of looking for a home. Unbeknownst to me, after bidding for my home and winning. My lender, Fannie Mae, informed me that my mortgage could not be approved! According to Fannie Mae policy, they could not extend mortgage loans to students with an H1B visa.
Nevertheless, I continued searching for a way to make it happen. I eventually came in contact with a local credit union named Campus Federal that offered an ‘in house mortgage loan’. I was able to get my loan at 3.375% rate, and close on the house without further issues.
Hurdle #2: Managing A Downpayment
Down payments on a house is a hefty chunk of change for anyone. Especially for students, who often skate on thin ice, financially speaking.
I came to the USA with empty pockets. However, through a graduate assistant-ship I was able to save up enough money in my first year to send some of it back to my family.
Additionally, I was fortunate enough to land an internship as a software engineer at Microsoft. The job paid handsomely, and utilizing reimbursement for mileage, I took a three day road trip in my old car from Louisiana to Washington State.
No matter how you cut it, there are no free lunches and easy money doesn’t fall from the sky. However, by putting in the hard work and keeping your eyes and ears peeled for financial resources; you’ll be able to manage to save up for it.
Keep your eye on the prize, and know that no matter how much money it may seem for a down payment, the obstacle can only get smaller from here as you work hard and save.
Dedication paves the road ahead, and hard work will only propel you forward. If there is a will,
then there is a way.
Hurdle #3:
As a student with low income, how do you juggle the mounting costs of mortgage payments, utilities and unforeseen costs? What we lack in wealth, we may overcome with additional creativity and a little bit of know-how.
Here’s how I managed, taking in 18k per year.
Live and Rent
Make the most of your new property, and kill two birds with one stone. Consider living on-site, and rent out the rest of it. You’ll have an easier time to keep your eye on things, while simultaneously gain more control over your living arrangements.
My home contained 3 bedrooms. I simply took the master bedroom for myself. Then I rented out the 2 remaining rooms. I brought in $800 per month, which was just above my monthly mortgage payment.
Through this arrangement, I gained a humble bit of passive income, while building equity on the property by the month.
In my instance, I was able to rent out to one of my closest friends whom studied alongside me at LSU. Depending on the company you keep, you may have a pleasurable experience with friendly tenants.
However, it is advisable to maintain defined landlord/tenant relationships. Consider a friendship possibly turning sour. Now consider living next to it every day. No fun for anyone. Living with all of your friends sounds like a glamorous idea, until you have to enforce rent payments and house rules.
Buying Houses in Good Shape:
When shopping for my first house, I made sure to keep my eyes peeled especially for ones that had warrantee coverage for most of the important parts.
If you are starting from ground zero, you’ll want as few costly surprises as possible. But this is real life, and things break. When that happens, the last thing you want is to burn more cash on repairs out of pocket.
Sure, if you’re quite handy and can tackle any household repairs that come your way, you could probably save some dough by purchasing and older home. However, certain projects will require licensed contractors, and depending on the type of property, even engineers to take care of construction that requires approval from authorities. Be sure to thoroughly research relevant building laws in your area. Keep these in mind during your search, you might just save yourself immeasurable amounts of money and heartache!
Opting for a newer home may be pricier, but you will often avoid major overhauling of the property to make it suitable to rent. Minimize the risk by purchasing a newer home.
Learn How All of This Works:
As the old saying goes: Knowledge is power.
These words might be old as time, but take it to heart and you will be right as rain.
There is a reason entire industries have been built upon the buying and selling of real estate. Innumerable amounts of factors and methods are involved in the trade, in every single transaction that happens with every property. Arm yourself with knowledge, and go into this with information in your pockets. In the wonderful age of the Internet, all you need to know is before you. Read up, google up, and be prepared!
Many people leave it all to the pros. But the pros don’t come cheap! As long as you can maximize your own know-how, you’ll be able to handle many issues that inevitably arise. By taking the time to read this article, you’ve already got a foot in the right door.
My first home buying experience has taught me so much. I look back upon it with pride, and a great deal of joy. I hope to pass some of this onto you, so that you may take this journey with a guiding hand.
