How to Buy a Home

E174: How much Income do I need to make to Buy? DETAILS

Folks keep reaching out to David Sidoni with the first-time home buyer’s biggest question: “How much home can I afford?” 
Well, David has created a lot of podcasts about it, so you should totally go check those out. They’re super helpful and will give you some tips and ideas on how to answer that question. So, this podcast will be all about the numbers. Keep listening to get the data and formulas that will help be a GUIDE (not the rule) for you as you determine how you should prepare for purchasing your first home.
Here are some power takeaways from today’s conversation:
A recap of the last affordability episodes
Emphasis on the fact that these are guides, not rules
The NUMBERS
It’s up to you how much you’re willing to pay
Episode Highlights:
[01:27] A Quick Recap
First-time home buyers everywhere have one big question: “How much home can I afford?” That’s an excellent question, which is why David has a couple of episodes covering that exact topic. While it’s a common question, there’s one thing that David has said before that he’ll say again: there is NO perfect answer to this. Everyone’s situation is uniquely different and requires an individualized plan, so today’s look at the data just gives you a guide as you navigate your own circumstances. 
[03:42] The NUMBERS 
According to the mortgage rates on March 27, 2023, the day David recorded this episode, here are some of the deets:
If you have a 760 credit score, zero debt, you want to spend almost 50% of your monthly income on a mortgage, and you can put 20% down on a home, firstly - you’re a perfect person and probably not real. If you check all these boxes and have a combined household income of $93,600 a year, then you can afford a $600,000 home. This might sound like a fairytale and that’s because it kind of is. It’s likely that you don’t check every single box and that’s okay. It just means that you need a different plan for your situation. This is a guide, remember?
[14:58] It’s Up to YOU
If you see those numbers and are starting to freak out - don’t. Print the numbers out and put them on your wall if you want, but only look at them as a goal to work towards, not necessarily your own personal plan. By the time you hear this podcast, the numbers will already have changed. So, maybe don’t hang them up anywhere? It’s up to you. Just remember, that you also decide how much home you can afford. Maybe you can afford a $600,000 home. But, based on how much is leftover after taxes, do you want to?
For March 27th 2023 – and no longer to be used as a resource in any way shape or form after that time!
Listen to the podcast!
$600k SFR @5.99% 20% down
No Debt: monthly income of $7,800 47% DTI $93,600 Annually
$500 monthly debt: monthly income of $8,700 47% DTI $104,400 Annually
$1000 monthly debt: monthly income of $9,800 47% DTI $117,600 Annually
$1500 monthly debt: monthly income of $10,800 47% DTI $129,600 Annually
$400k SFR @5.99% 20% down
No Debt: monthly income of $5,100 47% DTI $61,200 Annually
$500 monthly debt: monthly income of $6,200 47% DTI $74,400 Annually
$1000 monthly debt: monthly income of $7,200 47% DTI $86,400 Annually
$1500 monthly debt: monthly income of $8,300 47% DTI $99,600 Annually
$200k SFR @5.99% 20% down
No Debt: monthly income of $2,550 47% DTI $30,600 Annually
$500 monthly debt: monthly income of $3,650 47% DTI $43,800 Annually
$1000 monthly debt: monthly income of $4,700 47% DTI $56.400 Annually
$1500 monthly debt: monthly income of $5,800 47% DTI $69,600 Annually
$600k SFR @5.99% 5% down
No Debt: monthly income of $8,800 47% DTI $105,600 Annually
$500 monthly debt: monthly income of $9,800 47% DTI $117,600 Annually
$1000 monthly debt: monthly income of $10,950 47% DTI $131,400 Annually
$1500 monthly debt: monthly income of $12,050 47% DTI $144,600 Annually
$400k SFR @5.99% 5% down
No Debt: monthly income of $5,800 47% DTI $69,600 Annually
$500 monthly debt: monthly income of $6,900 47% DTI $82,800 Annually
$1000 monthly debt: monthly income of $7,950 47% DTI $95,400 Annually
$1500 monthly debt: monthly income of $9,100 47% DTI $109,200 Annually
$200k SFR @5.99% 5% down
No Debt: monthly income of $2,920 47% DTI $35,040 Annually
$500 monthly debt: monthly income of $4,000 47% DTI $48,000 Annually
$1000 monthly debt: monthly income of $5,080 47% DTI $60,960 Annually
$1500 monthly debt: monthly income of $6,150 47% DTI $73,800 Annually
Resources Mentioned:
https://www.howtobuyahome.com/podcast/ 

E173: Interview: The Home-buying Adventures of Antwan & Chailee

From lost wallets to haunted U-hauls, superstitious folks will say that Antwon and Chailee’s Friday the 13th closing date was bound to be full of twists. But, for this amazing couple, it was still one of the best days of their lives as first-time home buyers despite all the surprises. 
Here are some power takeaways from today’s conversation:
Finding a knowledgeable team makes all the difference
The exciting story of Antwan and Chailee’s big day
Proper planning makes for a smooth closing day
The importance of having a guide during the loan process
Episode Highlights:
[05:33] It’s All About the Support
Finding the right support team is key to having a good home search. For Antwan and Chailee, once they decided they were ready to buy a home, they had several options for realtors, but ultimately they knew they needed someone with a LOT of experience. When they got in touch with a unicorn team, they knew they found the right fit. They learned so much about the process and had all their questions answered during that first meeting, convincing them that they found the Dream Team. 
[10:56] What Happened on the BIG DAY
The closing date was a series of unfortunate events. The movers showed up hours later than they were supposed to, Chailee lost her wallet during the moving process, and then the U-haul started making strange noises. But, some planning ahead did help them prevent some problems. They planned some crossover for the last day in the apartment and the first day in their home just in case. 
[21:12] Read the Fine Print
Antwan and Chailee had a unique situation when it came to figuring out the loan process, but their unicorn was able to guide them to resources who would give them honest feedback. They were encouraged to jump on a great opportunity, but were also advised to read all the details and make sure they viewed it from all angles to make sure that nothing bad would pop up later.

E172: Interview: The Right Realtor, Especially at 200K, should EMPOWER you

Single women are the highest and fastest-growing sector of first-time homebuyers. Today, David speaks with Eliza as she shares her journey to becoming a homeowner, finding a unicorn real estate agent, as well as finding the right lender and the right home.
Here are some power takeaways from today’s conversation:
Finding the right real estate agent and the right home
How a unicorn can help a first-time home buyer
A mindset change when buying properties
Finding the right lender
Episode Highlights:
[05:29] Finding the Right Real Estate Agent
Whether you’re looking for a property in a big city or a suburb, just remember that not all real estate agents are specialized in that. And so, you have to have a list of the things that need to be checked off before getting an agent. There are a lot of agents who can end up ghosting you, so you have to be wary of the people you want to do business with. Hence, communication is top of mind when it comes to finding the right real estate agent. The right agent should also be able to answer any questions you might have, especially if your real estate knowledge is scarce.
[13:48] Finding the Right Home
Life is not HGTV. There's really no perfect home so you've got to be able to manage your expectations when buying a property. And having this kind of mindset change basically propels you forward. Buying a home is like a jigsaw puzzle. Your perfect home is a puzzle of a home. But the one you buy has pieces missing. And so, you have to pick the one that has the least amount of puzzle pieces missing, and which is the closest to a complete picture. Otherwise, the only way you get that picture completely is if you have a bunch of cash and you pay somebody to build your home for you.
[19:52] Finding the Right Lender
When you decide to go through the credit union, just expect that they're not going to hold your hand through the process and they're super slow. And so, if you are trying to do something quickly, it's just not going to happen with a credit union or bank. That being said, choose a lender that would explain things to you without you having to ask anything or even when you don’t know what questions to ask. 

E171: The Big Bank Crisis of 2023: What Will It Do To Housing?!

Okay, so you’ve seen it all in the news - big banks are in a crisis right now. According to the news, we’re all done for! But, is that really the case?
David Sidoni dives into research and data to give you the REAL story behind the bank failures and how this could affect the housing market for this year. Also, he throws it into a handy-dandy cheat sheet to help you understand this mess.
Here are some topics from today’s discussion:
What got us into this mess
What FDIC-insured means
How this will affect housing
The sunny side of things
Episode Highlights:
[02:48] What Went Down
The big bank scare actually began before Silicon Valley Bank after a bank, called Silvergate Capital,  largely working within the cryptocurrency realm closed and liquidated its assets. From there, the panic spread to Silicon Valley Bank and beyond. Since then, the banks have been bailed out.
[07:23]  What’s All This FDIC Business?
The Federal Deposit Insurance Corporation guarantees up to $250,000 to every depositor, so it’s important to make sure that the bank you’re putting your money into is FDIC-insured in case your bank is in a similar compromising position. 
[17:52] What This Means for Real Estate
Everyone is talking about real estate in these news articles because there were some real big real estate names in the game. But, this won’t really hurt the home buyer directly. Instead, it may actually HELP them because it might just slow down the Fed’s interest rates a bit. 
Resources Mentioned
Bank Runs and Rescues: A Timeline of This Week’s Panics
Why Regular People Need to Know About SVB’s Sudden Closure
Ask a Nerd: How Will SVB’s Closure Affect Me?
Silicon Valley Bank, Proptech Hub For Real Estate Clients, Collapses 
Mortgage Rates Nosedive In Fallout From Silicon Valley Bank Failure
Signature Becomes 2nd Major Real Estate-focused Bank To Fail
How SVB’s Collapse Could Impact Housing Market
SVB Collapse Set To Completely Upend Housing Market
How 3 Recent Bank Failures Could Impact Housing Market
Savers Could End Up Being Big Winners After SVB Collapse

E170: Interview: 1st Time Home Buyers Find Compromise & the Triangle of Success

Jeff and Cierra moved to Florida and bounced around from apartment to apartment, but then decided to start preparing to buy a home once their lease was up. The deadline gave them a goal and helped motivate them to make the jump. After getting in touch with a unicorn, the rest is history and now Jeff and Cierra are living in their first house!
David sits down with them to discuss the process and tips for preparing well.
Here are some topics from today’s discussion:
Preparation is key
The importance of educating yourself
Setting goals can help the process
Negotiation can make all the difference
Episode Highlights:
[01:25] Finding Your Team Is Key
Once their lease was up, they wanted to be ready to move into their own place. They started planning and saving, working with a unicorn team to find the best match for them. Their deadline allowed them to manage their time well and eventually allowed them to move out of their apartment before their lease was up!
[11:10]  Educating Yourself Is Vital
While their unicorn was super helpful in guiding them through all the neighborhoods and options, educating themselves on what they wanted was the most important (and longest) part of the process. They needed to drive around and see for themselves where they wanted to live and where they could see themselves living, finally settling on a townhouse that checked their boxes.
[19:05] Life Is Full of Surprises
Jeff and Cierra found the townhouse and wanted to put in an offer. So, they negotiated and did what they could to sweeten the deal, but ultimately the sellers went with a different offer. While Jeff and Cierra were crushed, their luck turned for the better. The previous offer fell through and they were next in line. So, they made the deal and here they are!

E169: Woman Power: This Single Woman Bought Her First Home

Today’s How-to-Buy-a-Homie interview is with Joelle, a single woman who bought a house on her own. Accomplishing this feat was no easy task, but hard work and dedication led her to her first house in Florida! Now, she has the keys to her first house instead of relying on the unsteady rent market. 
From the finances to the emotional aspect of homeownership, David sits down with Joelle to get all the details about the home buying process. 
Here are some topics from today’s discussion:
Don’t let prices intimidate you
Learn about your state’s requirements for buying a home
Knowing your neighborhood is vital
Don’t hesitate to reach out and ask for advice
Episode Highlights:
[01:32] Don’t Believe the Unaffordability Myths
Once the pandemic forced everyone to work from home, Joelle knew it was time to find a place with more space. When she started looking, she was overwhelmed by the prices of homes in her area at first. But, after doing the math, she knew that, although the monthly mortgage payment was higher than her rent, she knew she was paying on a long-term investment - something that was truly hers. 
[24:59]  You Get What You Pay For
When Joelle was looking for a home, there were a lot of things to look out for. Sometimes a home price might seem outrageous at first, until you discover that there are a variety of factors that will affect it from the quality of the neighborhood’s HOA to the flood zone designation. Her unicorn realtor was able to help her navigate all these waters until they found the right home for her. 
[34:05] Taxes Make a Difference
Two things Joelle wasn’t expecting was the insurance and taxes that come with buying a home. While she had spent a lot of time worrying over the mortgage, learning about the taxes and homeowner’s insurance took her by surprise. Learning about your state’s requirements will also help better prepare first-time home buyers. 

E168: Get Off Your Ass!

It’s a tough title with some tough love behind it. 
David gets it, prices are high right now. But, that doesn’t mean that you should be sitting around waiting. Instead, the market is only going to get hotter, so DO NOT WAIT. If you’ve been keeping up on the podcast, then you’ve heard David’s interviews with several How-to-Buy-a-Homies and each of them said they wish they had jumped into the home buying process sooner. Take their advice. Take David’s advice. Get off your ass and start! With love, of course. 
 
Here are some topics from today’s discussion:
Overcome your fear and just dive into the process
Ignore the news - the market is not crashing
Many of David’s predictions are starting to come true
It’s time for first-time home buyers to jump into action
Episode Highlights:
[05:32] Unaffordability Is the New Normal
Homes in California are starting at $1.5 million and decent condos at $700,000. And these prices aren’t just in California! Markets everywhere are staying sky-high. Despite the crazy unaffordability, buyers are lined up left and right to throw in offers. This means if you’re ready to buy, you need to start getting ready NOW to make a move.
[07:36]  Don’t Listen To the News
The news is always late when it comes to reporting on the housing market, so don’t listen to them. They were also very late on reporting the housing lull at the end of 2022. There is no crash - it was just a lull and now it’s over. Just like that. At the moment, things are turning out almost exactly as predicted in episode 165’s urgent market update. So, it’s time to ACT.
[13:00] No Time Like Now
All the How-to-Buy-a-Homies David had interviewed so far recognized that they had some fears to overcome, but also wished that they had started the process sooner. They didn’t realize how much they were capable of until they had spoken to an expert team. Don’t let misinformation and myths put up stop signs in your home-buying journey. Just reach out for help and let professionals guide you.

E167: Interview: Buying a $300K Home With Only $18k? Yes!

Stick around until the end with this episode! This one is jam-packed with tips, hacks, and a super amazing end that even had David surprised. 
Alrighty, with that little tidbit in mind, let’s dive in: Your #1 First-time Home Buyer Advocate, David Sidoni, sits down with How-to-Buy-a-Homies Christina and Sean from New Jersey as they talk about how they DOUBLED their square footage from a small apartment to the home of their dreams. These folks totally rocked the home buying process and you won’t want to miss how they did it. 
Here are some topics from today’s discussion:
Home-buying hacks
Tackling debt before buying a home
How appraisals can help your offer
Always being willing to reach out for help
Episode Highlights:
[01:45] You Gotta Give Them Credit
Christina and Sean decided it was time to buy a home and reached out to David in July 2022. By September 2022, they closed on their first house. Despite not having the best credit and not being in the best financial spot, in just 10 WEEKS they went from renters to homeowners. But, this process began way earlier when Christina and Sean decided that they would take control of their finances by paying off debt and building a positive credit score.
[13:40]  Don’t Let Fear Stop You
Christine and Sean had a lot of things in their life that they thought might stop them from buying their first home. Instead, they overcame their fears and concerns, made the call to a realtor, and the rest is history. As David has been saying for years, no matter what your situation looks like, as long as you’re ready to buy, reach out and start getting on track to make your first big purchase.
[40:35] Knowledge Is Power
When you’re not sure about your financial situation or if you’re ready to buy a home, remember that knowledge is POWER. Christina and Sean weren’t experts when they were ready to buy their first house, but diving into research and getting help from professionals made them a dynamic duo.

E166: 1st Time Home Buyer - From Clueless to Duplex Owner

Dan and his wife went from not knowing a thing about buying a home to purchasing a duplex three states away in Spokane, WA. The couple’s lack of real estate knowledge, though it was scary, didn’t stop them from taking a leap of faith into the home-buying process. Listening to David’s podcasts gave them the knowledge and courage they needed to make the jump.
Catch up on this fascinating story!
Here are some topics from today’s discussion:
How to buy a home from out-of-state
Properly preparing your finances
House hacking with a duplex
Trusting in the home-buying process
Episode Highlights:
[01:39] Trusting the Process
Dan wasn’t sure about what to do when buying a home, but that didn’t stop him from looking into it. When he and his wife decided they wanted to move closer to her family, they began saving money and learning everything they could about buying a home. After four years of careful financial preparations, they knew it was time to make the investment!
[12:39]  House Hacking With a Duplex
Buying a duplex is a great option when it comes to “house-hacking.” Living in one half while renting out the other is an easy way to help mitigate the cost of a mortgage while still being the full owner of your property. This is what Dan and his wife did when moving to Washington, giving them the opportunity to make their move even more affordable.
[13:00] Preparing the Finances
Dan and his wife needed some financial support to make the purchase, but it ended up helping them in the long run. Making sure you have as little debt as possible puts you a step ahead when it comes to working with lenders.

E165: URGENT MARKET UPDATE

David is back with a brand new housing market update… or is he? While the news and the data are refreshed for 2023, the message remains the same: NOW is the time to buy a home. Not later, not after the crash, not at the end of the year. NOW. 
So, dive in with David as he drops some truth bombs about what you can expect as a first-time home buyer this year.
Here are some topics from today’s discussion:
More examples of how history repeats itself
Home payments offer stability in uncertain times
Inventory is going to affect this year’s market
Data and insights from experts
Episode Highlights:
[01:39] We’ve Been Here Before
We’re back to the most important deciding factor in the housing market: our old friend, inventory. There will be far less homes for sale in 2023, causing bidding wars to erupt and prices to stay mostly where they are. According to unicorn realtors all over the country, things are looking just like they used to be. Some are seeing up to 30 OFFERS on one home and people are waiving inspections and contingencies left and right. To hear all the philosophy and details about how to interpret some of this data, go back and listen to ep. 70 and 73. Almost the same thing that was happening in 2022 is happening again in 2023.
[8:22]  What’s Happening in 2023
If only the news was different, but unfortunately, here we are. The market isn’t looking too hot. But, that means you shouldn’t be listening to all those people trying to sell something. Take a look at the evidence yourself and listen to the real boots on the ground. That’s it - podcast over. Just kidding!
[13:00] Backing It Up With Some Facts
You may have heard that the market is supposed to correct this year, but there are some folks whose whole job is to look at the national data and they’re sending out some interesting articles that you need to check out. With such a shortage of inventory and such a high demand for homes, things are looking intense. That’s why this is an urgent message.