SPOILER ALERT: This does not end with an announcement that I've bought a house. So you don't have to worry about that. Yet.
Once upon a time, back when I was 19 and living on my own, I asked my dad about budgeting. His advice, delivered to me in that far away and long ago kitchen, boiled down to this: pay your bills.
We tallied my (relatively few) expenses. I tried to put a line item on the list for savings -- and he stopped me. Savings, he said, was what you had left over at the end of the month. This did not seem like a particularly aggressive savings plan to me. But I wasn’t going to argue with my dad.
And, because I soon would not really have enough to pay all my bills anyway, the question of savings just sat there in the background, from whence it would rise up and make me feel like the failingest failure ever on a regular basis.
I wasn’t a failure. I was just poor.
Not the poorest person ever, by any means. But I was constantly playing the game where you pay whatever bill is due most urgently until you have enough to pay the next one, which has since become more urgent. It's a survival methodology, sure, but it ain't really a good long-term strategy because one emergency can destroy your careful balancing. (As poor people well know.)
It's also a hard mindset to shake. While some people don't seem to have a problem talking about money, I am not from those people. I am from the people where my husband is the only person who knows my salary. And even that's because I have made myself talk money with him since taking over our finances. It's not quite like operating in a total vacuum because, you know, the Internet exists -- but it does mean that unless I break a lot of personal taboos, I don't have a fiscal advice network or support system. Which makes old habits even harder to break.
Fast forward to right before the holidays.
We'd found this house, and Ed was really into it and I loved it, too. So I started, tentatively and on shaky legs, to explore what the process even is for buying a house. Lemme tell you: it's mostly a shitload of paperwork.
The first thing I had to decide was whether I wanted to try to go through my bank or a mortgage broker.
In the general scheme of things, there are some folks who come across as a little, well. Used car salemanish. That's not necessarily a bad thing; it gets used cars sold, after all. But it's also not a characteristic in a person that invites a whole lot of trust. I still can't decide if all mortgage brokers come across like this or if it's just the specific one that the realtor referred us to. (Even so, he was a very nice man.)
I went with the mortgage broker in large part because I didn't know what else to do or why one wouldn't. I called and set up an appointment. I took a long lunch one day so that I could go meet with him. I had so many questions.
Plus about 50 pages of printed-out forms he'd emailed me.
Here is what the broker needed from me: photo id (I used my passport), two months of bank statements for every account I have, two years worth of tax returns, my social security number, my current income, and paperwork for anything else I might have like IRAs or whatever.
Y'all, I've never even shown Ed my bank statements.
It's more intense than being naked in front of other people. Because, you know, naked is just naked. Everybody has a body. But being fiscally naked in front of someone? It highlighted that, in many ways, I still operate the way my dad told me things worked: I pay my bills. If there's anything left, that's savings.
I do this even though I KNOW -- because I've read the same financial advice everyone has heard about -- that the first principle of savings is that you pay yourself first.
Budgeting is one of those things that used to freak me out because no matter what I did, no matter how I restricted myself (oh, the parallels between budgeting and dieting), the numbers still didn't add up. There just wasn't enough money. But there is, at least for the moment, enough money now.
So I showed up and, essentially, gave this stranger all the info he could want and then I waited for him to sit in judgment of me. That's what it felt like, and that's what I was primarily afraid of: that he would judge me and find me lacking and then say we couldn't ever -- never ever -- buy anything more expensive than maybe a pack or two of gum.
(This is partially absurd because I just bought a damn car, OK?)
In fact, that's what I went in expecting. Because why would anyone lend me a whole bunch of money?
My credit was, at one point, pretty abysmal. Not just because I, too, fell prey to the lure of the free T-shirt in college when the credit card companies set up their little tables. But because after that long-defunct Visa account, I stayed away from credit. So I didn't really establish any of my own.
The broker pulled a soft report of my credit -- there are soft pulls and hard pulls and only a hard pull will count against your credit score. He reviewed it with me and determined that there was nothing I could really do in the short term (other than continue to make payments on my car on time) to improve my credit score. There are some things that only time will fix. Your credit score is playing the long game, so you have to be patient with it.
He also advised me against opening store cards -- because the line of credit extended to you is often only for the amount you are trying to spend. This is bad because, when you are applying for a loan, one of the things that people examine is your debt to credit ratio. If you've had a lot of credit extended to you, and it's all maxed out, that's not actually a reassuring sign.
I have a couple of store cards I've acquired in recent years (Lane Bryant, I shake my fist at your bra sale!), but because they carry very small balances in relation to the line of credit on them, that works in my favor.
But even with my truly mediocre credit, the broker returned to me a number that kind of blew my mind. Not because it was super outrageous (especially given the housing market here in the MCO) but because it was anything at all.
Holy shit, I said to myself. We could buy this house we were looking at.
That's when the paperwork got real. I signed acknowledgments and permissions and all sorts of things in a haze of, "Just initial here, please." I was careful to make sure that nothing I was signing obligated me to spend any money or do anything in particular; in fact, my first question to the broker was about who was paying him. (Most brokers work for firms that make their money by selling your loan. You shouldn't have to pay them anything.)
One of the papers I signed was a breakdown of the potential closing costs for the house that we liked. That number almost made me throw up on the broker's desk. Fortunately, for buyers, it's actually not all that outrageous to ask sellers to help with these costs.
And, honestly, that was kind of that. I was in the broker's office for about an hour and a half. And when I left, I knew what I was pre-approved for and I knew what I needed to do next: make an offer on the house we were looking at.
That was a shockingly simple matter, too.
We met the realtor at Denny's on a Friday night after work. We told him what we were willing to offer, and then signed some paperwork to that effect. And then, because it was a short sale, we settled in to wait for a while. He headed off and we ordered some Hobbit-themed food.
(The food was the worst part of the experience, honestly.)
I told you how things ended with this particular house -- we didn't get it. And that kind of sucks, but it's also kind of totally fine. Because there are lots of houses out there. And the big important part of this whole experience wasn't even the result; it was setting aside my internal conviction that no one would ever approve me for a home loan because I don't have a perfect credit score and oodles of money in the bank.
It's possible that if I'd tried this a year ago, they would have laughed at me. But it's also possible the broker would have given me some good advice on how to improve my credit and then approved me for a smaller amount. There's no real way of knowing and playing the "What If?" game has really only led to drinking. Lots of drinking.
I'm not in a hurry to buy a house. But knowing that I can? That's a game changer right there. And it actually makes me want to be more fiscally responsible. I am starting to think of saving money for a better down payment as some kind of extended financial game.
Which is just weird because usually the only really exciting thing about money is having enough of it to pay for things. I think about sitting in my great-grandmother's single-wide trailer, too. There are new habits to learn, new ways of doing things. I'm 35 -- some people would argue I should know all this shit by now. But those people don't know.
If I can buy a house, well. What can't I do?
The answer is, of course, plenty. But there's possibility now, where before I thought there was none.