A Home to Call Our Own

Joseph and Jessica Bembry had plenty of reasons to give thanks this past Thanksgiving–two days earlier they had closed on their first home. Despite the financial crisis, the couple was able to purchase a single-family home in Clinton, Maryland, for $385,000, bidding farewell to their apartment in Washington, D.C.

The Bembrys were chosen as the winners of Black Enterprise’s Fourth Annual Homeownership Contest from more than 400 qualified applicants. (The pool was shallower because of harsh economic times.) They received a cash prize of $10,000 toward the principal on their mortgage along with home furnishings valued up to $5,000 provided by At Home With B. Smith.

Working with a real estate agent and pre-approved for nearly $400,000, the newly wedded couple–married last July–took three months to find their way to solid ground. “It was a matter of what we wanted, what we were finding, and what we could afford in terms of the search and the home buying process,” says Jessica. For instance, the couple asked their agent to steer clear of homes more than 10 years old because they felt an older home would require a lot of upgrades.

“We even thought about moving to West Virginia because houses comparable to what we wanted cost less there,” adds Jessica, “but the commute to work would have been more than an hour.” Jessica works as a staff assistant at the District Department of Transportation; Joseph is a plan review coordinator for the Department of Consumer and Regulatory Affairs.

Owning a home is essential to the American dream. But that dream has turned into a nightmare for many families. Last year, foreclosures (default notices, auction sales, and bank repossessions) were filed for some 2.3 million properties, up 81% from 2007 and up 225% since 2006, according to RealtyTrac.com. Escalating matters: Home values are being wiped out. In 2008, $3.3 trillion in home equity disappeared, with 17.6% of all U.S. homes worth less than the mortgages owed on them, reports real estate Website Zillow.com.

Declining home sales created a buyer’s market for the Bembrys. Still, the couple chose to walk a disciplined line. “We didn’t want to be in a position where we’d have to turn around and sell the property because we had purchased something we couldn’t afford,” says Jessica. “We were willing to walk away if we couldn’t have it our way.”

The couple explains that they wouldn’t allow themselves to get talked into custom options, such as bay windows or an upgraded kitchen. They went with the standard four bedrooms, two-car garage, and backyard to avoid incurring additional costs and a higher mortgage.

Jessica, 44, says it helps that she and Joseph, 51, are an older couple who began their relationship with conversations centered around their financial situations and life goals. “It was important for me to have a partner who was traveling in the same direction I was. We were very honest with each other,” says Jessica, who was married once before at age 19 and has a 23-year-old daughter, Lyza.

The duo has not always been on the same financial page. Joseph has been money-conscious all his life. “My mother was a big saver,” he says. “I paid cash for everything. At one point I didn’t have any credit history.” Once he established credit he worked hard to maintain a good standing. Jessica, on the other hand, admits to making some poor choices, spending more of her income than she saved early in her career, which includes a 13-year Navy stint. “When I looked at my wasteful pattern and realized it wasn’t going to get me where I wanted to go,” Jessica says, “I began to undo some of the damage I had done so that I could purchase a home.”

Aiding in their quest was the ability to capitalize on the first development phase of a new community, Woodburn Estates, which was completed last October. Using the developer’s in-house mortgage company, NVR Mortgage Finance Inc., which allowed for a more simplified financing process, the couple received a competitive mortgage rate (the mortgage has since been transferred to Countrywide Home Loans).

But it wasn’t a smooth ride all the way. When the financial markets began to collapse, the Bembrys’ own negotiations started to waiver. There were some hesitations on the developer’s part. The couple got a 30-year fixed mortgage at a very decent 5%. As for the down payment, they shelled out $20,000 instead of the $10,000 they had initially planned, nearly depleting Jessica’s 401(k) from a previous employer.

The Bembrys realize they have to work even harder now to rebuild their retirement savings. In addition to the money put into the house, the couple withdrew $30,000 from their 401(k) accounts to finance their nuptials. Currently, they have about $15,500 combined in retirement accounts.

A plus is that the couple has worked hard to improve their credit. At the time of their home purchase, Jessica’s credit score was 621 and Joseph’s was 759. They have

about $12,800 in credit card and personal debt, and there will be another $25,000 in student loan debt due in about five years for Jessica’s undergraduate education at Trinity University, where she is just 12 credits from her degree.

Since buying their home, the couple has become a bit more frugal, curtailing entertainment and utility expenditures, and adding energy-saving thermostats. Their $2,500 mortgage payment constitutes the biggest chunk of their $3,500 to $4,000 monthly household expenses. Fortunately their household income got a bump up to $98,000 when Jessica started her current job at the DDOT in December.

Like most Americans, the couple is worried about the economy. “We read the headlines and watch the news. We know people around us are losing their jobs. It’s frightening,” Jessica says. But since both work in the public sector, they feel relatively secure about their jobs. And the recent transplants–she relocated from Boston in 2006 and he from New York in 2003–say the local economy has been picking up. “Permits are getting issued for new construction and there are licenses for new businesses,” says Joseph. “And President  Obama gives people hope. That’s a positive.”

This story originally appeared in the April 2009 issue of Black Enterprise magazine.