Some would say that it is impossible to be buying my first home when living on one income. They would be wrong. I’m proof that it doesn’t matter how much money you make, when you have the dream of home ownership anything this possible.
I’m a young single mother who bought my first house at age 24. I was making at the time 25K a year. My first time going to bank was very nerve-racking and embarrassing. I believe if the advisor could laugh in my face she would have done so. But even when I was refused for the loan, I was still determined to buy my first house.
Before leaving her office, I made sure to ask her everything that I would need to qualify the next time.
I needed to check my credit history
For me this was the scariest part of the process since I really didn’t understand the concept of credit. As you know I was a shopaholic, therefore credit was for new clothes that I couldn’t afford at the time. And the total on my statement was never paid in full. I was from the school of minimum payment. I had to make changes to reach my goal. Therefore, I phoned Equifax and TransUnion (Credit Companies) and got my free credit report mailed to me. When I received it a couple weeks later I was shocked to see how much I owed and what was in collections. If R9’s meant a good grade, I would have surely passed. LOL
Called all the companies who I owed
This was not an easy task; since I had to speak to many different people in many departments. I even had to prove that I was living on a low income. I showed them all my finances even my bank statements and all my expenses. You might think that this was invasive but I did what I had to do; since apartment living was not for me.
I made payment arrangements with everyone Visa, Master Cards, Department store cards… It took me 3 years to pay it all off even my car loan. Once they where paid off I asked them to mail me a letter stating that all was paid in full and that the account was closed.
Rebuild your credit
It was alas time to rebuild. This was challenging since I was an avid shopper and I’m an emotional shopper to boot. So, I had to take drastic and conscious steps not to shop. I had to refuse friends and family’s invitations to go hang out at the mall. By wearing what was in my closet I went a full year without needing new clothing.
These days you won’t catch me shopping without a purpose. The item must be needed for me to make a purchase. Once I decided not to shop anymore; it was then okay to get a new credit card. I went back to the bank that rejected me and I applied for a $500 credit card. Spoke to the bank manager and told him my goals, explained that I paid off my creditors and gave him copies of all the letters. I was once a gain rejected since I didn’t have any savings.
Therefore, I spent the next 3 months saving some money. Since, I no longer had any debt to pay, I saved half of that money in a regular savings account with that same bank. The bank approved my credit application. I was over joyed that I had credit once again. I was one step closer to my dream. The TD bank manager told me to never spend more than half of the credit limit and always make payments in full.
I had to move
It was a no brainer to relocate. I had enough of my apartment and the amount of rent I was paying. I moved closer to my mother’s house at lower rent. At the time, the move seemed like a good idea. But moving closer to the people I love and making new friends created an even greater challenge. Consequently, there was more opportunities to go out and have girl’s night… I was spending so much money that saving was getting harder and harder to do. My weekends were all about having fun. I believed that God was testing me to see how badly did I wanted my dream.
Hence, I had to make changes, create boundaries otherwise and started saying NO. I would lose my dream by saying No. Not everyone understood my dream and some people even laughed at me. Single mother at 23 years old not making a lot of money wanting to buy a house. I needed to accomplish this goal and trust me it took a lot. I did loose some friends since my goals didn’t mesh with theirs. That was my price to pay.
Time to buy a house
I stuck to my advisor’s words for the next year. Hence, I never spent more than half my credit limit. I didn’t spend any unnecessary cash; no more shopping as a hobby. When I received my tax return, for the first year since I’ve been an adult, I didn’t have any unpaid bills or payments to make to my credit cards. I saved that tax return and every extra penny I made. Consequently, it was time to return to the bank. I saved 15K on my 25K salary annually, they were impressed. The advisor checked all my information and my mortgage application was once again sent in.
I was so nervous waiting for the bank to call me. When they approved my application, it was a joyful moment. They approved a loan for up to 200K, I didn’t buy a house for that amount since the bank always gives you more than you can afford. I bought a very nice home for my son and me, in a small town outside of the city.
You might think when you see me as a successful young single mother that it all came to me easy. No, it didn’t. It took a lot of rejections, tears and hard work to get to where I am today. And now I appreciate my little home even more because of this.
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