Health, family and unexpectedly buying our first home

A few years ago, my husband and I were living in a high cost of living area we loved.  Our neighborhood was beautiful, we had great friends, and there was lots of opportunity for career growth.  

When we started contemplating buying a home, it didn’t take long to realize our estimated budget wasn’t going to cut it there.

A dream far out of reach

With the only filters being our budget, a single family home, and a 30 mile radius of where we were living, Zillow came back with 5 results: two were lots of land and the the other three were houses that needed extensive repairs.

I started increasing the home prices and distance to see what else would show up. As I did it, it became apparent why my colleagues had such long commutes to work and most laughed at the possibility of retiring before 65.

Saving a down payment was going to take years! A 15-year mortgage was out of the question, and most houses in our already-stretched budget were in need of major updates and repairs. At that point we were oblivious about taxes and the additional costs of owning a home so I am glad we decided to pause and consider other alternatives.

My husband and I were opened to the possibility of moving.  After all, I could likely do my job from a different home base. Also, my company often had openings in many regions of the country thus relocation without having to change employers (which was my preference) was not out of the question.

The power of margin

I was in the middle of my pregnancy when my husband received the phone call about his dad latest emergency.  As the only child, he had to go and take care of him and the situation.

Shortly before that phone call, there was also a major medical emergency with my family back in my home country. 

Financially, we were able to assist beyond the usual and luckily, everything turned out OK. Being able to help with both family emergencies showed us the incredible power of having margin in our budget.

The experience put into perspective that we didn’t want to sacrifice our ability to save and give for the sake of over-purchasing a home.

An opportunity we didn’t see coming…

After the incident, my father in law could no longer live in his home where the only full bathroom was upstairs.  He wanted to sell the house as quickly as possible. He was done with home ownership but wanted to continue living independently after recovery. Ideally, he just wanted to rent a small apartment and keep his life as simple as it could be.

A family friend, who was a real state investor in the area, suggested we purchase the home as an investment property. The fact that the house needed some aesthetic work drove down the price significantly for the neighborhood.

The idea was that we could cover the mortgage with rental income and we could check in on the property during our regular visits to my father in law.  She was considering purchasing the home if we weren’t interested in doing it ourselves. 

Assessing the risk and reviving the dream

At that point, we could make the down payment and have some money left over. Paying the mortgage there while paying our current rent was going to be tight but doable. I ran the numbers without counting on a renter to make sure we had some time to update the house and handle vacancies afterwards.

However, there were a few issues.  The money we had saved was a combination of emergency funds, maternity leave funds, and our early savings for a down payment.  We wouldn’t have much money for the repairs that were needed (at least at first).  We could do the very basic, may be that was enough to rent it out as soon as possible. 

Despite the difficulties I liked the sudden opportunity of owning a home. Recently, that little dream had vanished and it had now become a real possibility.

Even though it had not crossed my mind initially, my husband brought up the possibility of moving there.  Being closer to his dad would make it easier to check on him and his health issues regularly.  That fact alone was compelling as I only wished I was closer to my own parents to help them out more often than I can with them living abroad.

Living there would also allow us to own a home with a 15 year mortgage while not having to pay [a high] rent at the same time.  It made a lot of sense financially but it would also mean leaving our friends and the community I had behind. However, our new home would be a driving distance away and we weren’t oppose to family road trips.  

Embracing uncertainty and a growing belly

The key to making it all possible was that I had to get approval to relocate as I wanted to keep working with my employer. I would be asking for a relocation a few months away from my due date which added a layer of complexity to the process.

There were lots of unknowns and the timing felt risky but we decided to leap as my gut feeling was strongly telling me to do so…or may be it was a kick from the baby, who knows Either way, we bought the home at a fair market value with the intention to rent it and the possibility of moving.

To alleviate the need of a down payment while my maternity leave was approaching, we did a sales agreement with my father in law with the purpose of getting a mortgage as soon as I went back to work.

I requested the relocation at work and my belly grew larger as the clock ticked.

Meanwhile we were making the basic repairs to the house.  The budget was getting tight (because everything cost more than you think it would!) but I was hopeful about the relocation to the point that I wasn’t even preparing a nursery at our current home.

Trusting, imagining, and allowing

Back when I had lost my hope, I remember a friend suggested I felt the feelings that a home would give me, and I would do this often.  I would imagine being on the back porch holding a coffee mug, watching my son play in the backyard, having a home office that also had a yoga mat and a family room where we could laugh together watching silly movies. 

I am a bit woo woo myself so I would light a candle, sit on my yoga mat and breathe in the scent with my eyes closed imagining I was sitting on my yoga mat at our first home. I felt a feeling of peace and belonging and an easiness on our finances.  Our home felt cozy and warm, welcoming and familiar.

I stopped thinking about the “how” we would make this happened, I just trust that it would.  And even though the circumstances weren’t ideal, the chance came, dressed in a scary outfit but it showed up and something in my gut said, “this is it!”… leap!

The good surprises

I went to visit my father in law and the house once more before my due date was too close to travel.  He was happy that we were keeping the home in our family and that there was a possibility we could be close by.

When it came to the house, it was still tough to believe that the neglect could in fact be reversed but it was getting there (as our account kept going down…yikes). 

My husband kept going back and forth to check on his dad and make sure our house would be at least move-in-ready if my relocation request was approved.

We finally got the news that I could relocate.  I ended up taking a different role that also seem to appear out of thin air after I set the intention that I wanted to be as present as possible for my little one.  Less travel, a higher-income promotion in my third trimester – who would have thought that would be possible!

The not-so good surprises

We had already applied for a mortgage, so we could get out of the temporary sales agreement. 

Our friends (the real estate investor) suggested that the higher appraisal after the repairs would result in enough equity built up that a down payment would not be needed.  Except that the mortgage was for “the appraisal value or the original sale price, whichever was lower.”  That last statement was a curve ball we didn’t expect.  Our funds were already depleted right as I was going into maternity leave, this was the punch after everything was going too well to be true.

After crying my eyes out following the call with the news, we decided that somehow it will all work out. We got creative to get extra income, lowered our expenses as much as possible and, luckily the same friends that advised us, offered us a short term loan to finalize the purchase.

It wasn’t the ideal situation but we planned to take out a HELOC as soon as we could to pay her back and then attack the loan as fast as possible.  I hated being back in (non-mortgage) debt again but we didn’t have lots of options considering I was about to start my maternity leave and didn’t want to do so with minimal savings.

The silver linings

We totally ignored the advice of not making multiple big decisions in a short time frame.  Within a couple months we bought a fixer upper, moved, had a baby, changed jobs all while navigating health issues with both of our families.  Money was tight, but I kept trusting that everything would work out and somehow it did. 

The mortgage situation put us on a pinch, but the good news was that when the dust settled we had a 15-year mortgage payment that was less than half our previous rent (including taxes).  Because of that, we paid that HELOC in just a few months after I returned to work. We could look forward to a completely different financial outlook than what we had a few months prior when we were barely making any traction with our money.

Having to take care of a little one was exactly what we needed to not sweat the small stuff as we got our house together and settled in our new place.

Fast forward a couple years and I sip my coffee while I type this on the back deck, watching my son run and play around the backyard.   Our neighbors still stop by and thank us for transforming the former eye sore of the street. We were able to keep a parent a home and my flexibility allows me to be very present while still making an income that allows us to walk the path towards financial independence.

I could have never guessed we would be where we are when I was eight months pregnant filled with uncertainty about future.

We learned innumerable lessons along the way, but we also learned to trust that everything works out when we are resilient and ready to get creative if the circumstances demand it. 

We also have a better understanding of the importance to have a solid financial foundation as we had a shaky one that. While it helped us take advantage of the opportunity to own a home, it wasn’t firm enough to keep us confident throughout.

My husband and I hit many bumps on the road but always worked it out together.  We came out with our first family adventure as a trio and a stronger marriage. 

This October we actually decorated for Halloween (as previously the Halloween decor was by default) and we will never take the health of our family for granted.

That was the unexpected way in which we became homeowners.

If you made it this far, thank you for listening to our story and I hope it showed you the power of trust, flexibility, and building some margin into your life. After all, it is not about replicating other’s circumstances but realizing that life is filled with up and downs that we ride towards our goals and dreams.

How did you buy your first home?  What lessons did you learn through the process?

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