Reasons to Buy a Home: My Personal Journey

When I lived in poverty, I dreamed of owning a home. I often tell the story of driving my kids through the surrounding neighborhood where two and three-story homes sat bayside. We looked at the homes for sale and talked about what we wanted in our house. My son told me, “Mama, I want a house with an upstairs.” We all believed it was possible, but nothing in our current circumstances spoke to that reality. The six of us had just moved out of our van (the tenth move in the 7 years of my firstborn’s life), settled down temporarily in one of the bedrooms in my mom’s house, and I was looking for a full-time job.

For me, homeownership meant stability. It meant I would finally be putting down roots. No more layoffs, housing instability, or struggling to put food on the table. I dreamed of a home because I dreamed of something I could call my own that wouldn’t be ripped from under the raggedy carpet I was standing on.

Let me be clear. I live in a capitalist society. Once I hit high school, we moved to apartments in a suburban (ahem, White) area, and I was exposed to a side of life I had never seen before. Two-story houses, fancy cars, people having money I never saw in my family. I both envied and hated what I saw. Yet, once I became aware, it was impossible to go back. I am certain part of why I dreamed of homeownership was also because that’s what was waved in my face as the mark of financial stability.

Is Homeownership Right for You?

That right there is why I’m writing about homeownership today. Maybe you too have been told it’s the mark of success and the way you know you’ve arrived at the American Dream. Lest we forget, the so-called “American Dream” was never meant for BIPOC folks. It was achieved by stealing land from the indigenous who lived here prior. Europeans were promised 50 acres of land for coming here, land that didn’t belong to them. Owning land paved the way for colonization.

Homeownership may be a mark of financial stability on some levels, but it is not the only one, and it certainly isn’t the mark of financial freedom. If you are in a place where you are exploring financial stability and freedom, be certain there isn’t only one path to get there. You can rent or even live in an RV and travel for the rest of your life and still be financially free.

When you are exploring what path is best for you, make sure it is the one you want. I do not say this because I regret buying a home. It is in fact one of the best decisions I’ve ever made for my family. It gave us everything I ever wanted and more. But I am not you. You have your own path to create.

Homebuying Tips

If you’ve made it this far, and you think buying a home may be the right move for you, there are some things you’ll want to consider. Interest rates are finally starting to drop, and though you won’t secure that 3% rate from a few years ago, you’ll continue to see rates drop through the end of this year, and another drop may come mid-year 2025. Decreased rates mean a lower monthly mortgage and increased buying power, but you still want to approach homebuying strategically. Here are some things to keep in mind:

1. Assess your financial health. Make sure your credit score is in good standing. You’ll get the best interest rate if your credit score is 740+, but you can still purchase a home with a credit score as low as 500 with an FHA loan and 10% down. Conventional loans typically require a credit score of at least 620. You’ll also want to check your debt-to-income ratio. Most lenders see a DTI of around 36% or lower as ideal. This means that 36% of your gross income goes to debt payments each month. The lower your DTI, the better before purchasing a home, as you’ll get a lower interest rate which we learned above lowers your monthly mortgage payment. Tip: Use free tools to monitor your credit score and pay off small debts to improve your standing.
   
2. Get pre-approved for a mortgage. Pre-approval is not the same as prequalification. Pre-approval is more in-depth and gives you a clear picture of how much home you can afford. Lenders will evaluate your financial status and offer a pre-approval letter, a statement saying the lender is tentatively willing to lend money to you, up to a certain loan amount. Lenders will typically check your credit score, require specific documents from you (paystubs, tax documents, bank statements), then issue the letter if pre-approved, which is valid for 30-60 days. Tip: Though pre-approval isn’t legally required, most sellers won’t consider an offer without it.
   
3. Understand the local market. Though interest rates are dropping, you’ll still need to consider the local real estate market. It helps to know how homes are selling in your area. What’s inventory like? Are homes selling quickly? Is it a buyer’s or seller’s market? These are important considerations when making an offer. It can mean the difference between whether or not you’re competing with multiple offers on a home and if you’ll have to offer over the asking price. Tip: Work with a local real estate agent to understand the market.
   
4. Work with a trusted real estate agent. Finding a real estate agent is simple if you get referrals from friends and/or family, or ask in your local community groups. A real estate agent can help you simplify the home search. They’ll help you navigate the market, negotiate with sellers, and provide valuable insights on the local area. A great agent will understand neighborhood trends, price fluctuations, and the best timing for making offers. Tip: Always ask agents about their experience in the location you’re targeting, and don’t hesitate to request client references or testimonials.
   
5. Budget for closing costs and additional fees. While lower interest rates reduce monthly payments, don’t forget about closing costs, property taxes, and insurance. A mortgage calculator will be your best friend. You’ll also need to consider earnest money, moving expenses, HOA fees, maintenance & repair costs, and home decor. These expenses can add up and should be factored into your overall homebuying budget, as you see fit. Tip: Closing costs typically range from 3-5% of the home’s purchase price.
   

Though the homebuying process is far from easy, some of us still think it’s completely worth it, if it’s a route you want to take. It’s brought us stability, a safe haven, a place for friends to gather, and at the end of the day, it’s also an investment. Home equity is the difference between the current value of your home and the amount you still owe on your mortgage. My property value has increased by 50K in just two years, and it will continue to rise all while I’m paying down my mortgage. Is homebuying the best way to invest? Depends who you ask. But if it’s a goal of yours, it can definitely be worth it.

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