Buying our first home!

posted 3 years ago in Home
Post # 3
4042 posts
Honey bee

@thefuturemrsD:  While home buying is exciting, I would like to encourage you both to seriously consider the commitment given you both just got new jobs. Being in a job for 1-2 years lends to more financial security knowing that it will work out. Obviously it is impossible to be certain that unfortunate things won’t happen (i.e., layoffs, you hate it, etc), but sometimes being cautious doesn’t hurt. Personally, we waited until we were both in our respective jobs for at least two years.

I would also suggest making sure you have a sizeable savings amount (after the down payment/closing costs are made). Only $200 a month seems like nothing, but if you have to repair the roof, replace a water heater or make a large purchase, you could be in trouble pretty quickly.

Lastly, it is typically recommended that housing costs not exceed more than 28% of your monthly take home income. So be sure that your estimate includes home owners insurance, taxes, and monthly upkeep costs. 

Otherwise, best of luck and enjoy the process!

ETA: If you are not planning on staying in the same area (city or neighborhood) for at least the next 5-7 years, you may want to reconsider buying. Also, having a sizeable downpayment is typically recommended too. 20% is ideal, and while you can possibly get an FHA loan with 3% down, you may end up paying more in the end due to pre-mortgage insurance and interest accruing over the years. Just some things to consider!

Post # 4
1629 posts
Bumble bee
  • Wedding: September 2011

Why would your parents try to talk you out of it if it is a good financial decision for you guys to make right now?


Post # 6
10384 posts
Sugar Beekeeper
  • Wedding: September 2010

Have you gotten preapproved from multiple lenders? That should give you more of an idea of what to expect as far as your approval amount, interest rate, closing costs (usually $5-10k upfront) etc. Are you including insurance and property taxes in your estimate that a 3-bedroom only costs $100 more a month? Have you factored in closing costs, appraisal fee ($400) and inspections ($500-800 usually) into your savings outside of a down payment? I think just talking to a bank about your employment history, credit scores, savings, etc is the first step.

Congrats! Buying a home is stressful but sooo worth it :-).

Post # 7
820 posts
Busy bee
  • Wedding: June 2014

@thefuturemrsD:  My FI and I just bought our first home and have had keys for 2 weeks today! It is so much fun house hunting, but the process of putting in offers, getting a counter offers, getting updated bank statements, waiting to close, and closing is a VERY stressful process. I never thought it would be that stressful, so just be prepared. There’s a lot of things you don’t know about things when your a first time home buyer.

I definitely recommend finding a great realtor. Ours was amazing and we couldn’t have asked for a better one. She’s been doing it for many many years and always had our best interest in mind at all times. Make sure you guys sit down and decide what you can and can’t live without in a house. You most likely will get pre-approved for more than your willing to spend. When we went to get pre-approved we told them a price we were comfortable spending and wanted to know if we were approved for that. We didn’t want to know what we were really approved for.

For a FHA Loan we were told that whatever didn’t pass inspection we would have to get permission from the sellers for us to fix. Chipped paint, bad roof etc Just because you fix it doesn’t mean it will be yours either. You could put thousands of dollars into it and something happen to where you can’t buy it. So we went conventional because it made more sense for us. If you don’t have at least 20% down for a down payment then you will have to PMI which is insurance. It’s about an extra $80 a month for the next 3-5 years depending how much extra we can pay and then it will come off. You will have to pay for the inspection and the application fee out of pocket. We also had to get someone to look at the furnace so we had to pay half for that. There’s defiantly more expenses than I had originally thought before, during, and after buying a house.

We looked at 13 houses total in about 3 months. Some houses were okay and a few were just awful and disgusting. I thought we would never find one worth buying. I always thought how do you know your choosing the right house. Well you really just know. When we walked in, it just felt like home. I could imagine this being our first home. There really wasn’t nothing we disliked about it. This was the first house FI and I really liked which was surprising we agreed on it. Lol Sorry so long. I could go on and on. Lol Hopefully this helped. If you have any other questions just let me know! 🙂

Post # 8
11772 posts
Sugar Beekeeper
  • Wedding: May 2013

I would advise buying something cheap for your first house.

Mine was a 900sqft mobile home! My mortgage payments were like $400/month (2br, 1ba). Now that we’ve sold it, we’re using the 40K as a downpayment on our (hopefully) “forever” home!

Post # 9
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

I just want to echo a pp…. is your $20k down payment savings in addition to your 6 month emergency fund and your closing cost fund and your settling into your new home fund? I don’t want to be a downer, but you need to have more than just a downpayment. If the water heater busts a week after you move in, you are responsible for buying a new one, paying someone to install it, and cleaning up all of the water that leaked out of the old one all over your basment and stuff. You need money on hand for those sorts of emergencies. You are also going to need money for trash cans, lawn equipment, ladders, tools, and all of the random items that come with home ownership. Those expenses add up really quickly. Also, make sure your budget calculations allow you to save 3-5% of your home’s value every year so that you are ready for big repairs and maintenance items (new roof, deck replacement, new HVAC system, etc.).

On another level, make sure that you want the lifestyle that comes with home ownership. Make sure that you really want to be responsible for investigating and calling lots of contractors for quotes, that you want to do yard upkeep every single weekend, that you are cool with doing your own snow removal (if appropriate), that you don’t mind raking and bagging leaves multiple times each fall, etc. Not everyone actually likes owning a home.

Post # 11
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

@thefuturemrsD:  Going with a new build town home will definitely help minimize the hassles. 🙂 I’m sorry for your loss, but glad that you have your bases covered. If I may offer one word of advice about dealing with builders (and this comes from the experience of a good friend, so it’s not firsthand)…. choose wisely AND have your own real estate attorney look over everything. Our friends purchased a new build and were told all of these wonderful things would be coverend by the warranty and such, and our friends just believed the builder. Well, they got screwed. Things that were verbally promised mysteriously never made their way into the contract or warranty, and now our friends are stuck with repairs they never anticipated paying for. It really sucks for them. I think it would have been well worth their money to have their own real estate attorney look over all of the paperwork and explain it in plain english. Just something for you to think about. 🙂 Good luck!

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