I secured an $849 monthly mortgage payment on my first home in New York. A few years later, I feel trapped by it.
· Business Insider
Melissa Jean-Baptiste
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- I bought a home in 2019 for $195,000 with a $849 monthly mortgage payment that's hard to give up.
- I make more money and split my bills now, but this market makes buying another home feel impossible.
- For now, I'm looking at other cities while working toward saving a six-figure down payment.
In 2013, I threw reality out the window and reached out to a real-estate agent to try to buy a house.
I had just turned 25 and felt like it was time to have my own space, even though I had minimal savings and a steep student-loan balance that my salary as a high-school teacher was barely covering.
But as a first-gen daughter, my immigrant parents adamantly stressed the importance of ownership. So buying a home not only felt like the right choice — it also felt like the only choice.
It took several years after that initial outreach for everything to fall into place. By December 2018, I'd made my final student loan payment, and in January 2019, I closed on my first home.
As a single woman, I didn't want to buy too much house — there was a huge difference between what I could technically afford and what I could responsibly afford.
With that in mind, I purchased a 750-square-foot, two-bedroom co-op for $195,000. After putting 20% down, I locked in a monthly payment of $849.40 at a 5.125% interest rate for a 30-year mortgage.
Buying my own place felt like a tremendous win, because it was. Lately, though, it feels more like a pair of golden handcuffs.
Although I now make more money and split my bills with a partner, I feel stuck in my home
Life looks a lot different than it did in 2019, and so does the housing market.
I've left the classroom and transitioned into the tech industry, a career pivot that came with a substantial salary increase. Shortly after, my partner moved in, and we became a two-income household.
Everything felt like it was lining up perfectly for another tremendous win — buying another, hopefully bigger property! Then, we checked Zillow.
Comparable two-bedroom co-ops in my area were now regularly listed for about $349,000. Larger traditional homes down the block with four or five bedrooms were regularly selling for about a million dollars.
Beyond the drastic price increase, interest rates are also not what they used to be. The national average for a 30-year fixed mortgage has frequently been over 6.4% whenever I've checked.
I know how fortunate I am to have purchased a home when I did, and leaving it behind now would mean stepping into a market where my dollar buys significantly less at a much higher price point.
I feel stuck, and I know it'd be easier to just stay put — but I'm dreaming big and letting a little delusion lead the way with next steps rooted in reality.
I'm taking steps toward strategically buying a house in a wild market
While living in the home I bought, I'm preparing for my next move.Melissa Jean-Baptiste
Rather than just playing the waiting game, I'm carefully planning my next steps to help make a future move possible.
Growing income with intention. My salary has increased with each career move I've made since I left teaching in 2021, but I've kept my expenses as stable as possible to avoid lifestyle creep and maximize my savings.
For now, I'm trying to live on what was my salary from a few years ago while saving and investing the additional income — but the goal is to eventually earn enough so that a larger mortgage feels as manageable as my current one.
As a business owner, I'm also able to supplement my 9-to-5 income and continue to strengthen my borrowing profile. With consistent income growth and a solid credit score, I'm confident I'll be able to access the best rates available when the time comes to buy.
Saving for a six-figure down payment. My partner and I are working toward putting aside $120,000 for a down payment.
The larger down payment will, of course, help us lower the mortgage burden, and this amount also helps us stay within a realistic budget during our search.
With $120,000, we can put 20% down on a $600,000 home and avoid PMI, or we can put 15% down on an $800,000 home if the right opportunity presents itself.
It doesn't matter if we love the house listed for $1 million. We know it is not in the budget.
Expanding the search radius. I am a New Yorker born and raised. I love it here, and it'll always be home, but the housing market here is really expensive.
Because we have job flexibility, we've started actively researching markets outside New York where our dollar can stretch further without sacrificing quality of life.
We've visited several places across the country to see what might be a good fit, looking for a dog-friendly city with a decent cost of living and an accessible community. There's always something happening in New York, and we want the same feeling and experience in our new home.
Right now, we've got our eyes on Denver, which seems to offer all three at a slightly more affordable price point than our current area.
Treating my current home as a tool. Though it is not at the top of my list, I'm keeping my mind open to ways I can use my current home to help me secure a second one if needed.
Things like getting a cash-out refinance or a HELOC loan to help secure additional funds would be a last resort since it would impact our budget differently.
Ultimately, I'm not passively waiting for the perfect market conditions to appear
I'm proud of myself for buying a home, and I'm taking steps toward my next goal.Melissa Jean-Baptiste
It's easy to feel stuck in a home you've outgrown when leaving doesn't mathematically make sense. However, waiting in place for perfect home-buying conditions isn't ideal for me, either.
There's no guarantee mortgage rates will drop significantly or that housing prices will decrease anytime soon … if ever.
I didn't buy my home because it was the perfect time. I bought it because I planned, saved, and prepared for the next step with a little delusion to carry me to the finish line.
And this time, though I'm navigating a much more difficult market, I'm confident the steps I'm taking will serve as the key I need to unlock my golden handcuffs.
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