Immigrants find buying worth the investment

Sara Simmons and her husband Mark had been renting for six years and were about to sign a lease for a larger more expensive apartment when their parents suggested they buy a home.

Sara, who is 27, had not considered buying. As immigrants, Sara and Mark had moved to the U.S. to attend college, and renting seemed to be the simplest solution to housing. After finishing college, they moved to a large urban area where homes can be hard to find and somewhat expensive, so renting still seemed logical even though it too was more costly.

They moved into a small one-bedroom apartment that was almost three times the cost of their two-bedroom place at college. Still, they didn't consider buying. If renting was this expensive, buying would not be possible -- they thought.

Credit was a concern. Neither knew his or her credit status. They had taken out school and car loans but Sara wasn't sure those would be enough. She once had been rejected for a department-store credit card based on her short credit history. "In the back of my mind, credit seemed like a big obstacle." Another potential hurdle was that Mark was between jobs, and to Sara it seemed the obstacles were too many.

As the lease on the one-bedroom neared its end, Sara and Mark had begun looking at two-bedroom apartments to accommodate the many guests that visit them during the year (and to give their cat a bit more space). The larger apartment was much more expensive, and as they were about the sign the lease, their parents suggested buying. "They didn't like the idea of throwing away money on rent," Sara said.

The first thing Sara and Mark did was to review their finances and agree on a monthly payment they could handle. Their next step was to find a lender. They consulted friends and co-workers, made some phone calls and chose three lenders to start. They based their decision on recommendations, personality, interest rates and fees. Sara said the lenders were flexible and willing to work around their obstacles. "I learned to ask questions if I didn't understand something," she said.

The lenders were able to show them that what they thought were obstacles were just bumps. Sara's credit score was fine, in fact much better than she expected, and Mark received a job-offer letter that helped him qualify. Though their parents assisted with the down payment, they may have qualified for assistance from agencies or local programs. 

After they were pre-qualified by all lenders, they began searching for houses in their price range. Surprisingly they found more choices than they expected. Anticipating two bedrooms, they ended with three. The house is old, but it had been completely renovated, relieving them of spending more money on improvements.

Sara and Mark chose a 30-year fixed-rate loan "so that we could anticipate our monthly payment, not worry that it might change, and plan accordingly. It also just seemed safest and easiest."

Though their mortgage payment is slightly higher than their rent would have been, "it's amazing how your thought process changes," Sara said. They are willing to cut back other spending to make the payment because "we don't think of it as money wasted."