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Why We Decided to Buy a House and How We Plan to Do It

In 2020, my husband and I sold most of our belongings, moved into our newly-renovated RV, and hit the road. It was a dream we had been working toward for two years.

As you can imagine, the pandemic threw a bit of a wrench in our plans. We had already sold our belongings and spent our savings buying and renovating the RV, so calling it quits wasn’t in the cards. 

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Luckily, RV living is inherently well-suited for social distancing. We’ve been able to avoid in-person social contact while still enjoying some of the best natural beauty the U.S. has to offer.

As we approach our one year anniversary of life on the road, we’ve begun mapping out our return home, which includes plans to buy a house.

Read More: How Much Home Can I Afford? Understanding PITI and Mortgage Payments

If you foresee major changes in your budget, you can plan for different scenarios (buying a home, sending kids to college, retiring) using Personal Capital’s financial tools. They’re professional-grade and completely free, no strings attached.

Why We Decided to Buy a Home

As far as lifestyle goes, buying a home and putting down rooms is entirely the opposite of full-time RV living and traveling the country. And we’ve definitely gotten questions about why we’re pivoting from one extreme to the other. There are a few reasons we’ve decided on this goal.

1. We’ve always wanted to buy a home

When we hit the road in our RV last year, we knew it was temporary. We both had a desire to travel, and we wanted to have this adventure before buying a home and starting a family. They represent two different chapters in our lives, both of which are important to us.

2. We found our forever city

One of our goals while on our trip was to be on the lookout for cities that felt like home. We love Madison (the city we lived in before hitting the road). Still, we were open to the possibility of putting down roots somewhere else, at least for a while.

After visiting dozens of cities in states all across the western part of the country, what we actually found was that we loved Madison and couldn’t find another city that suited us as well. We know now more than ever that it’s home for us.

3. We can’t get what we want in a home with renting

Madison real estate is expensive, and we have a particular vision in mind for our future home. We love spending time outside, and outdoor space is a top priority for us. Given Madison’s current housing market, we simply can’t rent a home that checks all of our boxes for a reasonable rate for our budget.

6 Steps We’re Taking to Buy a Home

We aren’t buying a home immediately. We’ll return to Madison later in the year and spend some time renting before starting our homeownership journey. Here are a few steps we’re taking to prepare to buy a home.

1. We’re eliminating non-student debt

When my husband and I got married, we had a combined six-figures of debt. About $100K of it was student loan debt, but there was also some lingering credit card debt left over from my divorce. Since getting married, we’ve planned an aggressive debt payoff plan for ourselves.

One of our first priorities was eliminating all non-student debt before we hit the road in our RV. Unfortunately, we had to take on new debt in late 2020. Our car was broken down beyond repair, and we hadn’t saved cash for a new one. We’d like to go into homeownership with only student loans left to pay off.

2. We’re boosting our credit scores

We knew when we got married that we’d eventually be buying a house together, even though it was years down the road. But we started focusing right away on getting our credit scores to a place where we could get a great interest rate on a home. Paying off credit card debt helped a lot!

3. We’re saving diligently

We want to go into home ownership with as much of a cushion as possible. In addition to saving for a downpayment and closing costs, we’re saving for a hefty emergency fund and money to furnish our home and make any desired improvements. One of the reasons we plan to wait a bit after moving back to Madison to buy is that we’d prefer to err on the side of saving way more than we need.

Read More: The Fundamentals of Building Your Savings

4. We’re watching the housing market

We check in with the housing market in our home city on a regular basis. We’ve got a good idea of what neighborhoods are at the top of our list, as well as what we can expect to pay for what we want in a home. We’re also keeping an eye on new developments, since the idea of building is on the table as well.

5. We’re setting our own budget

We’ve talked a lot about what we would be comfortable spending on a home. We’ve done our research into the local housing market, and we know what we can expect to pay for our dream home. I also know that our income would allow us to qualify for a mortgage significantly larger. Rather than letting a bank tell us how much we can afford to spend on a home, we’re setting our own budget.

Our plan is to have our mortgage payment make up as small a chunk of our monthly income as possible. This is especially important to me, as I’m self-employed. While my income is fairly predictable, it does fluctuate each month. I have no way of knowing when I could lose a client, and I’d rather buy a house with the assumption that my income could be cut in half in the future.

Read More: How to Master a Household Budget

6. We aren’t forcing anything

Finding the right home is far more important to us than finding a home right away. We aren’t going to force anything, and we’re happy to wait until the right house comes along. We know that might mean renting for longer than we planned, but we’d rather wait on the perfect home. Our plan is to have enough money set aside that once the perfect house comes on the market, we can act right away.

The Bottom Line

Homeownership is a big dream for both my husband and me. But I also want to emphasize that it’s not right for everyone. I often see people perpetuating the myth that renting is “throwing away money.” That’s simply not true, and we aren’t looking at our home as an investment opportunity. Our decision has a lot more to do with the vision we see of our future home and how that fits with the local real estate market.

As you make your own decision, you can use Personal Capital’s financial tools to track your cash flow, set a budget for this major life expense, and also plan for other long-term goals like retirement.

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Personal Capital compensates Erin Gobler for providing the content contained in this blog post. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Erin Gobler is a money coach who helps people pay off debt and reach their big financial goals without giving up spending on the things they love.
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