How I Bought My First Home: A 24-Year-Old Engineer in Maryland

Credit: Illustration: Zain bin Awais

Welcome to “How I Bought My First Home,” a new Lifehacker series where I ask real people about how they really sealed the deal on their first home. This week, I chatted with Noah*, a 24-year-old engineer in Maryland.

Purchasing your first home is an exciting milestone, but it often comes with unexpected hurdles. Home prices are going down in some markets, and rising in others. First-time homebuyers often face challenges like limited inventory, rising prices, and competition from cash buyers. Here’s my interview with Noah about how this 24-year-old navigated the home-buying process for the first time, and how you might be able to follow in his footsteps.

First off, let's get to know our homebuyer

Here's what to know about Noah:

Age: 24 years old

Location: Pasadena, Md.

Marital status: Single

Job/income: Associate Fire Protection Engineer / $87K

Now, let's take a look at the home-buying costs

Noah shares the cost breakdown of his first home:

Cost of home: $429,500

Down payment: $200K

Closing costs: $16,200

Reserves: None

Moving: $40 for U-Haul

Mortgage payments: $2,079 monthly

Taxes+Insurance+HOA Dues: $515 monthly 

Now, here's my Q&A with this engineer about the ins-and-outs of securing his first home in the current market.

How did you approach setting a budget and deciding how much home you can afford?

I was fortunate enough to be aided financially by my parents who helped me with a larger than average down payment, $200 thousand. With this down payment in mind, I set my budget during the home search process to $400-$450 thousand or requiring a maximum loan of $250 thousand. This range was affordable for my current salary including the additional insurance, utility, and tax costs. To calculate this, I used online tools to roughly estimate what size loan would provide me with comfortable monthly payments.

What should first-time homebuyers know about mortgages?

Don't expect the first mortgage offer you receive to be the best one. While it may seem daunting to explore multiple lenders, especially when your credit score is on the line, it does benefit you in the long run as it's encouraged for you to shop around before finalizing your decision. I recommend comparison shopping with at least two, but preferably three lenders to fully evaluate your options. 

How much of your income goes towards your mortgage?

Roughly half of my monthly take-home income goes toward mortgage payments (49%).

What would you have done differently?

My biggest regret as of right now is that I waived the home inspection prior to closing. When presented with the offer to buy my home, in order to rapidly close on a good deal, I waived the home inspection. While this did allow me to win the home, it did present a number of challenges down the road. My house was built in 2018, so it is fairly new; however, within the first couple of months, I did identify several items that required repairs including a severed exterior internet line via landscaping, faulty dryer, and an air conditioning unit in need of a new evaporator coil and refrigerant. In hindsight, some of these items could have been identified in the inspection and saved me both time and expense in repairing them.

What unexpected costs cropped up?

The only major unexpected cost came with the AC system repair. As mentioned above, several months after move-in, I realized that my air conditioning system was no longer blowing out cold air. Upon a paid inspection, it was determined that the evaporator coil had been compromised with multiple holes and that all of the refrigerant in the system had leaked out. The total cost of both the inspection as well as a new evaporator coil, refrigerant, and labor totaled to around $2,500.  

What tips do you have for other first-time buyers?

The three main tips that I'd recommend to other first-time buyers are to use your real estate agent to the fullest, not get emotionally attached, and keep paper copies of important documents:

Take the extra time to find a real estate agent that has your best interests in mind. My real estate agent was a huge help, not only in identifying new properties for me to view, but also in helping me determine what I truly was looking for during this whole process.

Don't get emotionally attached to any one house early on. It's very easy to get attached to a property while on a tour or during an open house. There is a lot of time and competition that can arise in between seeing the house and closing on it. Don't get discouraged if you do not win the offer on your first or even second option, just keep looking! There will always be another home that you can win and make your own.

Keep hard copies of all the documents you receive at closing. While virtual copies are more versatile, it's still helpful to have paper copies for reference, especially to look back on in the first few months in your new home. It also provides peace of mind having an additional set of documents, should technical issues arise with your devices.   

How long did the home-buying process take you, start to finish?

I first reached out to my real estate agent's team on Feb 28th, 2023. From then onwards I was put in touch with my agent, applied and received a loan, toured multiple houses in my preferred cities, and eventually closed on my home on Oct. 13, 2023. In total, the home-buying process took me between seven and eight months. I will admit that I was not super active in my housing search until Aug. 2023 due to other life distractions, so this timeline may be longer than that of someone who is eager to find and close on a house. Prior to Aug. 2023, my involvement included occasionally looking into the listings sent virtually by my agent and expressing interest where applicable. After Aug. 2023, I became more active in searching for listings myself as well as touring possible homes to get a feel for what aspects I was looking for and preferred in my ideal house. 

*Name changed to keep the subject anonymous. This interview has been lightly edited for clarity.