Note: This article is the first of a three part series:

Part One: Buying My First Home
Part Two: The Hidden Costs Of Home Ownership
Part Three: The Home Equity Loan, The Foreclosure Notices, And Renters That Never Paid

Money Mistakes Made Young

Mistakes are best made young. And I made plenty. Growing up poor, I spent my teen years in rentals and apartments with my parents. The idea of owning a house was something foreign to me. During college, I started working and eventually left college for full time work making great money during the tech boom as a fledgling computer programmer. I bought the car I could barely afford, went out to lunch every day, rented a place I could barely afford, etc. I was 19 and making more than my parents ever had combined – I was on top of the world.

Then, after someone suggested buying a house, I figured, why not! After all, like every other Tom, Dick, and Sally – I was in real estate school getting my license.. I knew a little about real estate! The year was 2002 and rates were low, home prices were fair, and it was a decent time to buy a home. I was young and inexperienced with money, near my credit limit on all revolving accounts, so I placed my trust with Continental Homes (now DR Horton), to help me see what I could afford. As you may imagine, they were more than happy to help!

Low and behold, the financial calculators I’d played with online were off. I could buy the home I wanted, albeit a bit further out than I had hoped to be (Southeast Mesa was not as developed as it is now, especially Signal Butte and Elliot roads), for just under $200 more than it cost for my 2 bedroom apartment!

And best of all? I could buy with only putting down $700 dollars – all that was left in my savings account. I made sure that there was nothing else due from my to begin building and that there would be no other out of pocket costs and after my sales representative assured me of those facts, I put pen to paper. We were first time homebuyers using an FHA mortgage with a “Neighborhood Gold” program picking up the rest of the costs. Seven Hundred Dollars buys a four bedroom starter home.

The Things You Learn When You Buy And Build Your First New Home

The home was built, stucco’d, and eventually moved into. We were the new American family. A working dad and his girlfriend who stayed at home with their young child.

We could pay the mortgage, our car payments, and minimums on credit lines. But we could not afford to pay for landscaping.

No problem, the HOA gave us 6 months. I’m sure we can save up the thousand or two we need by then!

You see, the new American family has faulty money logic. But I argue that it’s not necessarily our fault. If you tell a young child that the sky is made of jello enough times, they will learn to believe you, despite their own inner voice telling them it’s obviously not. Repetition breeds familiarity and that familiarity begets trust. We are young and when we are told that we CAN afford it, we decide to do just that. Advertising has almost perfected its pitch – young people are the cigarette smokers of old. They say it doesn’t cause cancer and is safe.. why would they lie to us? Smoking is cool!

So I cut where I can to save a few dollars and after a timely project bonus from work, have enough to at least get some cheap rocks in the yard. Home Depot will help us pick the lowest maintenance and cheapest plants our HOA will allow us to plant. However, we cannot afford a sprinkler system, so we opt for a soaker hose with a timer. Not the best fix, but it satisfies the requirements for now.

We could pay the mortgage, our car payments, and minimums on credit lines. But we simply can’t afford to get both front AND backyard landscaped. The backyard will have to remain dirt for now. The windows will have to remain covered by bed sheets we hoped would pass as curtains from the outside.

Tags: foreclosure, short sale, home equity, residential, real estate, arizona, renter, keller williams, karma, bankruptcy