Life has been super busy but super awesome! Even amongst a pandemic such as covid-19 coming in this year, I still feel so blessed since my foundation isn’t dependent on the external factors around me. There are many blessings coming my way but the one I wanted to focus on for this post specifically is the fact that my fiancée and I bought our home at the start of this year (January 2020), let’s go! Maybe you too feel like it’s impossible to buy a house in the current market, or your income is too small, or the process is too complicated. Well hopefully this post and my story in general will motivate you, equip you, and set you off on a journey of also owning your first home.
Laying the foundation
I want to start off by laying down the foundation, the core drivers and beliefs first before running through the physical process we went through. Although it might sound wishy-washy, I can honestly say that we wouldn’t be homeowners right now if we didn’t nail these foundations before setting out on our journey. This is what separated us from other people who probably have a better profile, yet they don’t have a house yet. I don’t mean to say that in a rude way, but it’s just reality because I know these people and I even work with some of these people! This isn’t just about the physical steps to buying a house, because honestly most of you are probably smart enough to google that yourself. So first and foremost, ask yourself this question:
“WHY? Why do you want to buy a house”
If you tick 90% of the boxes to qualify for a mortgage and buy a home, but you have nothing driving you to push through that last 10%, then you will never own a home. Yes there are people out there who automatically qualify and can buy whatever they want, but I want to inspire and talk to those of you who were like me and didn’t have everything handed to them. What you need to do is spend some time asking yourself this question, go ahead and write it out, whatever helps you get it deep inside your brain and heart. The funny thing about foundations is that people can’t see them. Even the actual houses and buildings we’re trying to buy have foundations that are under ground and not visible on the surface, yet they are literally the only thing enabling it to stand, to survive, to exist. Even though everyone only sees the physical layer, the building or what you actually accomplish, that is just evidence of the foundation you laid. For example, the taller the building the deeper and more solid those foundations need to be. Same goes for us, if we’re wanting to tackle something really big like buying a house in Auckland, then we better have a solid foundation to start building that very tall financial commitment!
This underlying WHY will push you through all the natural trials you will face on this journey towards home ownership. It will be the thing that helps shape your weekly spending habits that will build your mortgage profile. It will be that motivation to keep going even though you got rejected by 5 different banks and mortgage providers. It will be the thing keeping you focused on what you can control even though the world around you is saying that people like you can’t buy houses in this market. Yes it’s quite cheesy, but it’s very real and I can testify to that.
For me and my fiancée we had a time where we sat down and sorted out our goals as I shared in my last post. I had just bought the engagement ring so didn’t have much to start with, and we had 3 big financial commitments on our heart. First being to own our home, and the other two being an epic wedding and honeymoon. As you know, we are Christian so our underlying WHY is always rooted in God, but I hope you can still pick up the lesson here even if you have different beliefs. So for our example, we carried Psalm 37 which talks about trusting in God and committing your ways to him, and later on saying that he will uphold us and solidify every step we take, but the core one for us was verse 4:
“Take delight in the LORD, and he will give you the desires of your heart.”
When I heard Synthea saying she wants us to have our own fresh home to start our lives together in, that became a huge desire within my heart. We currently don’t live together meaning marriage is going to be the start of that joint lifestyle, so this goal of providing a home for my future wife/family was naturally tied to our wedding day. Me being a numbers guy and doing the math only to realise it was impossible, I’m so glad I caught on to this underlying WHY of trusting that God can give me the desire of heart which was to provide a home for my future wife. From that moment on, I knew we were set to achieve our goals purely on faith and a tonne of motivation. It’s easy to say, but in reality it’s hard to legitimately carry and put action to. We were (and still are) graduates fresh out of uni, so it was inevitable that we would come across a few storms that would try to shake us off our foundation. Let me share a few of these stories with you.
Storm Stories
One of the most obvious and distracting storms I faced was the environment around me, specifically ‘the housing market’. The fact that I worked at the bank didn’t help in this area as part of my role was to be somewhat in touch with the banking environment. Every single morning when I read the media reports I would come across an article saying how hard it is for anyone to buy a house in the current market. I even remember one article specifically pointing out a 21 year old who did the numbers and was complaining about how impossible it was, saying that cutting out the avocados won’t do it. I know it’s kind of true, but the media being the media really did paint a huge doom and gloom picture for anyone wanting to buy a house, especially if you are young. The funny thing is that this is an external factor that I can’t control, so why focus so much on it! I bet that in a couple years people will still be complaining about the housing market and looking back at these times saying “actually, it was easier back then and nooow it’s truly impossible”. If that’s what you’re hearing, just know that I also faced the same pressure, so for me whether ‘the average house in Auckland’ costs $800k $1m or even $2m, it doesn’t matter, I am going to buy a home for my wife and family to live in. So I let my WHY bring my focus back on to what I can control – selecting the right Kiwisaver and overall investment approach towards owning a home for example.
Sometimes you will come across people that genuinely cut you off. Now obviously you can’t get a house without a mortgage right, so you need a mortgage provider to help you out. Maybe one day you can do this without human contact, but for now you do have to connect with a physical person, whether it’s a broker or directly from the bank. Sadly, I had many of these people cut me off from even applying for a mortgage purely because they saw our profile, 21 year old graduates with low income. I even had a one call me saying it wasn’t worth the drive out to meet with us in person because all it required was a quick call saying we’re not ready. There was another broker that made our meeting 15 minutes long by saying “please come back in about 3 years”. But once again, I carried my WHY through all of that so I’m sitting there thinking “I’m getting married within a year so I will buy a house within a year!”, and obviously that person wasn’t going to help me on that journey so I will keep looking for someone who will.
When we did come across a broker who was willing to work alongside us, we could then action the exciting part of looking at houses to buy. There was a small 2-bedroom 63m2 (square meter) duplex home (meaning it shared a wall with another home), and we genuinely got excited about putting an offer on it. The offer was matching the asking price, our broker believed that we could do it, what could go wrong right! Well just before Christmas 2019, we got rejected by the banks, essentially saying the asking price of property was overvalued and the amount we were wanting to borrow for it (even though we could qualify) didn’t quite meet their loan-to-value (LVR) requirements. Yes we got upset and frustrated, I mean if you can’t buy a 2 bedroom duplex with no garage or backyard in a town right on the edge of Auckland, that’s quite the storm to try push you off your journey towards home ownership. But at the end of the day, I still held on to the truth that my God can give me the desires of my heart and that he will support me on every step towards providing a home for my future wife.
These stories can go on and on, making an offer on land only to have it go up $40k over the weekend which pushed us $40k beyond what we could afford since we were already pushing the boundaries with our budget. Getting additional land and building costs over $20k which threaten to take away the house or perhaps the wedding even. I feel like we have made it through the biggest storms, but there are probably more to come, and that’s okay because this foundation we stand on can weather all of it.
Conclusion
To keep it simple, lay down your foundations on knowing your why or whatever it is that will drive you before you set out on this journey towards home ownership. In my next post I will run through the physical process, but for now I hope that you are inspired and motivated by this story. Because if a 21 year old grad who also just spent all his money on an engagement ring and needs to cover an entire wedding can do it, then so can you!
Key Points:
- Know your WHY
- Focus on what you can control
- Foundations help you weather any storm
