How To Buy Your First House

The Wall Street Journal says it's a good time for first-time homebuyers to buy a house. Except, the Journal says, it isn't. Twenty years ago, when we wanted to buy our first house, we got the same unhelpful, broadly general and contradictory advice. We decided to buy.

The house cost $215,000. We put down 10 percent (we scraped together the $21,500 + points from money I inherited from my grandfather, our tax-refund checks and some cash we got at our wedding.)

About two seconds after the closing, the real estate market crashed and the value of our investment dropped 20 percent. Then the 7.8 percent teaser rate on our one-year ARM started going up every year. Then I had all those expensive children. So it was impossible to buy a bigger house with a nice yard. But we did in 1994, by looting our 401K accounts. (That time we didn't get contradictory advice—EVERYONE told us not to do it.) This time it worked. The real estate market slowly started to rebound and, eight years later, we sold it for twice what we paid.