First time home buyer (hopefully!)

posted 3 years ago in Home
Post # 3
Member
97 posts
Worker bee
  • Wedding: August 2014

My FI and I just closed on our first house together (my first house ever) last weekend. I have to say that I found it a lot more stressful than I thought I would. Hopefully we won’t be doing that again soon.

My advice is to not get discouraged if you don’t find one the first time out. I got frustrated after several houses that we wanted to look at sold after being on the market for less than 5 days. But we ended finding a perfect house for us. Luckily in our area new houses were coming on the market every week. Also spend sometime looking into how much more money you will need to have besides the down payment, if you haven’t already. Good luck! 

Post # 4
Hostess
30313 posts
Honey Beekeeper
  • Wedding: September 2011

Definitely keep your heads up, don’t expect to find your perfect house right away.  Relax, and have fun! 🙂

Post # 5
Member
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

You need to know your budget (not the number a lender says you can afford, but the number you can actually comfortably pay each month while still saving at least 10% of your income for retirement, eating more than ramen every day, and maybe taking a vacation every once in a while). You also need to know your future plans. Do you want kids? If so, will one of you be staying hiome after they are born or will you be paying daycare. Factor that into your budget as part of your 10 year plan.

You need to know what your lifestyle goals are to make sure that the house you choose fits in your life. really take your time on this step and ask yourself what kind of life you want to lead while you live in this home. If you want a bunch of dogs, maybe that town home with the tiny yard and neighbors right on top of you is a bad idea. Or if you love having your weekends free, maybe that place with a huge yard and a long list of to-do projects isn’t going to suit your goals.

You need to know what your credit scores are and exactly what is on all 3 credit reports for whomever will be taking on the loan (one or both of you, depending on your situation). And make sure to “season” the money in your down payment and closing cost account. Lenders want to see that the money has been in your account for 3-4 months. If it hasn’t, they are going to ask where it came from and require documentation of its history. This is very annoying to do, so it’s far easier to just season it.

You need to know that you are in good hands with your agent. Your agent should be your most vocal advocate, an extremely reliable source of unbiased information, and someone you can have full trust and cpnfidence in. Don’t be afraid to interview several agents, or even fire one if he/she is not making you feel like a top priority. There are lots of good agents out there; don’t settle for a mediocre one.

You need to know that you can shop around for lenders. Also, if you are a top candidate (substantial downpayment, really good credit) it pays to work with 2-3 lenders throughout the buying process so that you can bid them against each other when it’s time to actually apply for a mortgage on a home after you are under contract. Making lenders compete can get you the best terms possible. This strategy saved us $35k.

And I’ll end with this… you need to know that it is okay to take your time, and even walk away from a place you like because it just isn’t the right deal for you. This is a big decision, so be cautious.

Post # 6
Member
7098 posts
Busy Beekeeper
  • Wedding: August 2012

Have you talked to your bank about a loan yet?

Post # 8
Member
931 posts
Busy bee
  • Wedding: August 2012 - Sunset Harbour

start getting your paperwork together NOW. It is ALOT of stuff that you need, and you don’t want to scramble at the last minute. 

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

@iloverocks:  Around here you need pre-approval from a lender for a real estate agent to even take you on as a client, and definitely before you submit an offer. On three of our four contracts we had to submit our pre-approval letter AND a financial disclosure because sellers want to know that they are dealing with someone who actually has the funds to successfully close.

Closing costs are typically 3-6% of the purchase price. The lower the purchase price, the higher the % because certain closing costs are fixed (e.g. inspection cost, appraisal cost, lender fees). Closing costs are also affected by the time of the month that you close. Closing at the end of the month = less closing costs than closing at the beginning of the month because part of your closing costs is your prorated mortgage payment for that month. If you close on the 2nd, you are paying for the 29 days left in that month. But if you close on the 29th you are paying for only 2 days of that month. And they are affected by the time of year that you close. If you close near the beginning of the property tax year you are going to have to put more upfront money into your escrow account so that when the new property tax bill arrives, there will be money available in your escrow account to pay it. We closed at the beginning of the month and only 25 days before the start of the new property tax year, which is pretty much the worst timing ever, but it was the seller’s preferred closing date. Since we were in a multiple offer situation, accomodating the seller’s requested closing date made ours a more attractive offer.

Whether or not the seller pays closing costs is very dependent on your local real estate market conditions and customs, and also on the particulars of your deal. The seller paying some or all of the closing costs means that the seller walks away with less money. Many sellers simply cannot afford to take more loss on the sale then they already are. And the more competitive the market, the less inclined the sellers are to pay closing costs. Why should they when they think there will be another offer that doesn’t require such assistance. And some sellers have the mindset that if a buyer is asking for closing cost assistance, it’s a sign that the buyer may not have enough money available to close the deal. When you are one of several offers, that may be the reason yours gets rejected. Sellers want to sell, not waste time dealing with a buyer who really isn’t fully prepared to buy. All that said, seller assistance is very common in many markets. Your agent will be able to tell you what kind of market you are hunting in.

What sort of mortgage jargon do you need clarification on? If you throw out some terms, I am sure the Bee can translate into normal English. haha A really good book to check out of the library is Home Buying for Dummies. It does a good job of covering the important stuff and explaining the terminology.

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