ADRIENNE BAILON-HOUGHTON
Having this meal is super special. So I would say the secret ingredient in all of this would be curiosity.
NATURI NAUGHTON-LEWIS
Yes.
ADRIENNE BAILON-HOUGHTON
I could be on like my fourth house ownership and I still got 20 million questions. Right?
NATURI NAUGHTON-LEWIS
I mean, I'm still learning to this day.
KYM WHITLEY
I always learn, but I'm gonna learn what this tastes like.
MULTIPLE VOICES
Exactly. Go in. It's so true.
ADRIENNE BAILON-HOUGHTON
Thank you to our friends at Progressive for getting us together. This, to me, is super special because I absolutely love hosting.
NATURI NAUGHTON-LEWIS
And she's so good at it.
ADRIENNE BAILON-HOUGHTON
And becoming a homeowner was a huge part of that. So, I figured we'd get together, have a great conversation about home ownership, what it's done for us, what it'll do for the generations to come. This meal reminds me of my grandmother and her dream was always to become a homeowner. She left a home in Puerto Rico and came here to the States and she actually never got to reach that goal. So, the fact that —
NATURI NAUGHTON-LEWIS
She did through you.
ADRIENNE BAILON-HOUGHTON
Exactly. You know what I'm saying? For me it's a constant reminder of like, wow, she didn't accomplish it, but I did. And I'll make sure that my son accomplishes even more than I ever did. First of all, I have known this one right here literally since I was 15 years old.
NATURI NAUGHTON-LEWIS
We're starting with me?
ADRIENNE BAILON-HOUGHTON
She's super talented. We go way back to 3LW. We were in a girl group together.
NATURI NAUGHTON-LEWIS
We were teenagers living in bunk beds. So, if you want to (SINGS) hear a little no more, just let us know. Baby I'm gonna do it right.
ADRIENNE BAILON-HOUGHTON
I love it. Kym, we go way back. You literally have been with me co-hosting on The Real a million times, but you are the funniest person I know, and I love the fact that you are always speaking up and empowering our community about homeownership. I'm ready to learn from you.
ADRIENNE BAILON-HOUGHTON
And I'm about to ask you a million and one questions, Dr. Lynn Richardson. Okay. You're an author. You literally give insight to so many people about home ownership.
DR. LYNN RICHARDSON
The entire financial house, all of it.
ADRIENNE BAILON-HOUGHTON
What would you say is your recipe for success when it comes to home ownership? Give me the top three tips.
DR. LYNN RICHARDSON
Well, the first thing is to make sure you buy a home that you can afford. Tell yourself the truth. You know how much money you have. And I highly recommend your total mortgage payment — your principal, interest, taxes, and insurance — are no more than one fourth of your take-home pay. The second tip, when you're in the home, make sure you stick to your financial calendar. Have a financial, your financial plan.
ADRIENNE BAILON-HOUGHTON
That's a plan for success with a budget and a calendar. Love that.
DR. LYNN RICHARDSON
And the third tip I would say is don't fall in love with the walls. Please, know when to get out. So when you look at the numbers that say, this is how much I'm spending, so I'm eating away at my equity, I have equity, but money don't grow on trees. That's real money coming outta your bank account.
ADRIENNE BAILON-HOUGHTON
Yep. So, you got the most you'll ever be able to sell that for is at its peak.
DR. LYNN RICHARDSON
I have to say this to someone and if you're gonna stay, make sure you have the home in a trust so that your home can be passed on to your heirs.
KYM WHITLEY
Is it best to buy in a neighborhood that might be a little higher than your budget or do you just buy somewhere that you really love to be?
DR. LYNN RICHARDSON
You never buy higher than your budget. So let's just start there. The money is more predictable than anything. Money says one plus one equals two. Period.
KYM WHITLEY
Say I've never bought a home. You know, there's a first-time buyers thing, veterans thing you can get. How do you find these things out?
DR. LYNN RICHARDSON
So, you definitely have to have a home team, a financial coach, a mortgage professional, a real estate professional, a real estate attorney, specifically, not any attorney, a real estate attorney. You do not go to a foot doctor if you need brain surgery.
KYM WHITLEY
Wait, let's back up. Who is the mortgage, the mortgage professional. I ain't talked to the people when I bought the house. I ain't talked to them since. So, who am I calling?
ADRIENNE BAILON-HOUGHTON
Well, you gotta start calling them. Here's the thing she's saying. You actually can continue to use those people throughout the years. Keep in touch with them, make sure that you created a relationship with them.
DR. LYNN RICHARDSON
And that's one of the questions you ask. Ask your mortgage professional. Say, "Can you please show me your home buying timeline?" If you ask someone who keeps in touch with their clients, they'll say, "We're gonna close on the home in three months. I'm gonna do a post-closing review in one year, I'm gonna do an annual review, and every year after that I'm gonna do an annual review." And if they never mentioned it, it's because they don't do it.
NATURI NAUGHTON-LEWIS
I didn't even know that was a question to ask. So, it's funny thinking about, you know, ownership seemed like such a faraway plan in my head.
ADRIENNE BAILON-HOUGHTON
The dreams we had.
NATURI NAUGHTON-LEWIS
The dream as a kid. I want to buy my parents a house. That was a dream. Buying my first home was challenging because I was single. I didn't realize how difficult it was to get your credit and be trusted as a young woman who didn't have income of a husband. And I became a single mom. Like, I did it and I'm just grateful that I didn't give up because there were times where I was like, this is hard.
KYM WHITLEY
You didn't expect to do that did you? I was like, I'm gonna have a husband before I get my house. And then I was like, oh no, you better hurry up and get you a house. That kind of thing. It was scary.
ADRIENNE BAILON-HOUGHTON
It is. It is so scary. I actually found out how scary it was just trying to rent. Crazy enough, I realized that I had terrible credit because I was standing in a leasing office where they ran my credit and in front of everybody, they were like, let's try this again. I was like, is there a problem?
NATURI NAUGHTON-LEWIS
And that's just to rent. They go through your whole life if you ever get a house.
ADRIENNE BAILON-HOUGHTON
And in that moment while renting, I was like, I'm gonna get on the right path. I'm gonna start figuring out how I can clean up my credit. Technically my first home ownership happened when I was 19, 20 years old.
NATURI NAUGHTON-LEWIS
Good job.
ADRIENNE BAILON-HOUGHTON
No, not good job. This went all kinds of wrong people. I bought a condo in Miami that I had never seen.
NATURI NAUGHTON-LEWIS
No, you didn't. Unbelievable.
ADRIENNE BAILON-HOUGHTON
And a boyfriend who took commission.
DR. LYNN RICHARDSON
Yes. Oh my goodness.
ADRIENNE BAILON-HOUGHTON
This is important to know.
DR. LYNN RICHARDSON
This is important. I was born and raised in Chicago. My grandmother was 75 years old cleaning homes, so wealthy people putting me through college. I didn't have a whole lot of money. I got a whole bunch of credit cards, couldn't pay anybody. When the credit card holders would call me and say, can you borrow the money? I'd say, can I borrow it from you? So I want everybody to know that everybody makes mistakes. I was married with a child and a very low paying job by the time I was 24 years old. And my husband and I decided to buy a home because it was cheaper than renting. So me and my husband got our little baby and our bad credit and went and applied mortgage credit. And I had no money, but I wrote letters of explanation.
ADRIENNE BAILON-HOUGHTON
What is a letter of explanation?
DR. LYNN RICHARDSON
It's called LOX. They wanted to know, well, why weren't you paying your bills in 1994? The underwriter wants to know that you acknowledge your mistake and that you were doing something different. Now when we got to the closing, we scraped up every dime, but then at the closing table, because we were first time home buyers, we got money back. So, you know, it was rags to rags.
NATURI NAUGHTON-LEWIS
But you are here now.
DR. LYNN RICHARDSON
We're here now.
NATURI NAUGHTON-LEWIS
My story's a little different because I didn't have credit because I was scared to get a credit card.
DR. LYNN RICHARDSON
For me, the biggest myth in history is where people say, if you have no credit, that's bad credit. Because if you do not have a traditional credit report, what your lender can, ask your lender for a non-traditional credit report, and what they'll do is they'll take your rent, your mobile phone, your car insurance, anything, all you need is a 12-month history. They will literally take that letter and they will create a credit report for you to present to the underwriter. So, we bought the house, but my credit was so bad I couldn't get any carpet.
ADRIENNE BAILON-HOUGHTON
Having the patience to wait for the carpet, to wait for the furniture and that your investment is worth it. It's long term.
NATURI NAUGHTON-LEWIS
And you don't have to do it overnight. Rome was not built in a day. And I'm learning that too.
DR. LYNN RICHARDSON
We come from a history of not having, and so our culture has taught us, when we get the opportunity to have it, we gotta show the world that we got it. And we do that with furniture and jewelry and clothing, but that stuff does not appreciate in value. You already won, you have the home. Rich people stay rich because they act poor.
ADRIENNE BAILON-HOUGHTON
That part.
DR. LYNN RICHARDSON
And poor people stay poor because they act rich.
ADRIENNE BAILON-HOUGHTON
I just did a housewarming party for one of my stepdaughters. It was the simple things of like, she needs a toaster. People that love you, that are surrounding you, they love to help invest into your future.
KYM WHITLEY
In Hollywood, people think you got this and got that. I drive a Flex, honey, I drive a nice little regular car. And someone said, they were like, ah-huh, Kym, we see you in your mama van. I said, you see this van? I said, but you should see my bank account.
DR. LYNN RICHARDSON
Oh, come on now. Come on now.
KYM WHITLEY
But we also have to say this. I say, when I bought my first home, I didn't buy my first home until someone encouraged me. And there was a woman who, who was a bank manager and she said, Kym, you on the show, you making this money. Why are you throwing this money away? I was like, what do you mean throwing away? I'm saving, I'm doing this. She said, you're living in an apartment. She was like, you need to buy a house. So, people have to go out and find people that they trust and talk to them and learn.
NATURI NAUGHTON-LEWIS
As a woman, but particularly in Hollywood, I feel like people expect you to just have it all. People see me, for example, in the show Power. It took me, I mean, four seasons to feel courageous enough to purchase a house. I was paying crazy $3,750 for a one bedroom in Brooklyn just to stay in someone else's. And I said, if I paid $4,000 and kept it for myself to put into equity into a home, my life would be changed. And now as a wife buying my house with my husband, the other thing is I just feel like when you have partnership, it does give you a little extra boost and courage and I'm grateful as a wife.
KYM WHITLEY
She's just gonna bring up the partnership.
ADRIENNE BAILON-HOUGHTON
Wait, you're not ready for this, Kym. I feel like you're going to be shocked by what I'm about to say.
KYM WHITLEY
Ok. What?
ADRIENNE BAILON-HOUGHTON
I never purchased again until I was 34.
DR. LYNN RICHARDSON
How much were you paying for rent each month?
ADRIENNE BAILON-HOUGHTON
Oh, easily five grand.
DR. LYNN RICHARDSON
Five grand, so 60 grand a year. And the thing about the fear of home ownership, fear is false evidence appearing real. It's not real. Because the truth is, if you're paying rent, you're paying a mortgage. You're just not paying yours.
ADRIENNE BAILON-HOUGHTON
Exactly. I'm paying somebody else's.
DR. LYNN RICHARDSON
Here's the other thing. In our culture, we don't really talk about money, but the truth is, this is about getting in a home, staying in a home, and then realizing your home's value. No one who communicates about their finances loses.
NATURI NAUGHTON-LEWIS
My question is, now that we've gotten through all the hurdles and the craziness to get up in there, how do we stay in the home and continue to build value?
DR. LYNN RICHARDSON
When you get in the home, the most important thing to do is to create a budget. I know no one likes the term budget because budgets feel like we are imprisoned. It feels like we are restricted. But the truth is, you have a calendar so that you don't double book yourself. If you were supposed to be here, but you were also supposed to be someplace else, you're gonna lose out on an opportunity and reputation. So that's what happens when we don't schedule our money on our financial calendar. Put some money aside for your emergency fund. That is absolutely, positively first. Just 10% of what you bring home. You need money, not just for the mortgage, but then everything for the home. What if your furnace goes out? What if your hot water heater?
ADRIENNE BAILON-HOUGHTON
Doesn't it feel like it's always something? It is an ongoing process. And there is beauty in it.
KYM WHITLEY
You are investing in yourself instead of someone else. And your future. Every time I think about that, oh my God, another thing, I'm actually putting money back into my home. So now, can I borrow some money?
NATURI NAUGHTON-LEWIS
I know I need 10%. If you just want to, you know.
KYM WHITLEY
How do you know when to call your insurance for what goes wrong in the house?
DR. LYNN RICHARDSON
So, you've got the home warranty that protects things like your appliances if something breaks down, if you can get a home warranty. But then you've got homeowners insurance, the technical term for it is hazard insurance, is to protect you if you have fire or flood or, you know, vandalism or if someone walks into your property and slips and falls and then decides to sue you.
NATURI NAUGHTON-LEWIS
What are things that you should do to actually improve the value of your home?
ADRIENNE BAILON-HOUGHTON
Okay, Dr. Lynn, you tell me if I'm correct. One of the greatest ways you can add equity to your home is by renovating kitchens and bathrooms for resale.
DR. LYNN RICHARDSON
Kitchen and bathrooms are absolutely positively the best. Not just for adding equity to the home, adding equity to your spirit.
ADRIENNE BAILON-HOUGHTON
It doesn't matter how big your house is, how small your house is, it doesn't matter, everybody hangs out where?
MULTIPLE VOICES
In the kitchen.
NATURI NAUGHTON-LEWIS
Because everybody want to what?
MULTIPLE VOICES
Eat.
KYM WHITLEY
Do you use your own money, or do you get a construction loan? Or what do you do?
DR. LYNN RICHARDSON
It all depends. Hold onto as much cash as possible because you never know what's going to happen. And then use other people's money if you can. So, see what the cost is of the credit that you're going to get, and then speak to your realtor and have them do a market analysis to help you determine what is going to be the value of that home when you renovate it compared to now.
NATURI NAUGHTON-LEWIS
Honestly, I know we are here to talk and to help other people, but I am learning so much.
KYM WHITLEY
If you talk about it, you'll find someone that's gonna help you.
ADRIENNE BAILON-HOUGHTON
I love that now we have this circle where we can ask these questions, but the real thing is not everybody may have Dr. Lynn, granted that they should be following you, but if they can't have a personal conversation with you, I love the fact that there are free tools at Progressive that give so much of this information out there.
NATURI NAUGHTON-LEWIS
Thank you, Progressive.
ADRIENNE BAILON-HOUGHTON
And I'm so grateful for that. I feel like now even the information that I learned from here, I've gotta continue to pass on.
DR. LYNN RICHARDSON
Each one teach one.
ADRIENNE BAILON-HOUGHTON
I've always loved that saying, and we gotta do this soon again.
KYM WHITLEY
Yes. Thank you.
MULTIPLE VOICES
Thank you. Cheers. Cheers. Cheers. Yes.
NATURI NAUGHTON-LEWIS
This was good.
