(Closed) someone explain the home buying process, please

posted 6 years ago in Home
Post # 3
Member
1342 posts
Bumble bee
  • Wedding: December 2012

@vorpalette:  Well, when you get pre-approved, the mortgage broker should sit down with you guys and explain everything.  When we got pre-approved (we haven’t bought yet), our broker had us come in and went through all the different scenarios and costs we would need to be ready to cover.

Post # 4
Member
4056 posts
Honey bee
  • Wedding: August 2013

@MrsJX3:  This.

A good morgage person will walk you through everything – our realtor then did it too for us when we had picked a specific house. Find a good morgage person you can meet with in person, not one of those online lending things. If you don’t know who to go to, pick a realtor you like and they will have lenders they work with routinely. That’s how I found mine.

Post # 5
Member
2808 posts
Sugar bee
  • Wedding: May 2012

It’s a pain in the ass 😉

In all seriousness, make sure you have a realtor that is willing to be your advocate. Our first realtor was a trainwreck and tried to get us to move into a house that was in no way fit to move into (inspection issues…don’t skip the inspection) and didn’t really do much outside of send us 200+ properties and ask which ones we wanted to see. It was really disappointing and we ended up having a great experience with the next guy. He found properties for us vs. just running an MLS search, scheduled showings and had printouts for us when we got there, and helped us negotiate the right price based on the market and what the other houses in the area were going for.

We are putting ours on the market next week using the same guy that helped us buy it the first time around.

Post # 7
Member
1342 posts
Bumble bee
  • Wedding: December 2012

@vorpalette:  Maybe talk to your realtor then?  They have worksheets they use to break everything down.  You might be able to just get your hands on one of them, but they are kind of hard to understand (at least for me) so I asked a lot of questions.  

Even if you’re not using a broker, it might not hurt to talk to one just to get info.  What they don’t know won’t kill them.  

Sorry I’m not more helpful!  We haven’t bought yet, we just went through the pre-approval process and met with the broker.

Post # 8
Member
8446 posts
Bumble Beekeeper
  • Wedding: April 2013

@vorpalette:  I think picking a good realtor is really key, especially for your first home.  We did it slightly backwards where we found our realtor first, then got pre approved (we already knew what lender we would use since Fiance works for them), looked at homes (over 50 homes, 10 month search), made the offer, went under contract and closed 1 month later.  I would highly recommend running a credit check to ensure that everything is accurate (we had to deal with fraud) since this will effect your interest rate. 

A couple of things though, don’t look for homes in the max pre approval range, it’s likely that you will have a difficult time living comfortably with that high of a mortgage (if you’ve done the calculations and can afford it cool, but most can’t).  When you go to make an offer, DO NOT give them your pre approval amount (esp if it’s well above what you’re offering), instead ask your lender to give you a pre approval letter for the amount you’re willing to pay.  Definitely make a list of must have, like to have, and can live without (i.e. I have to have a fireplace, gas stove but not an in ground pool).  Don’t settle because you’re getting caught up in the moment, it’s a lot like shopping for a wedding dress, only house regret is way worse than dress regret I’d imagine.  Hope this helps, and happy house hunting!

Post # 9
Member
14661 posts
Honey Beekeeper
  • Wedding: June 2011

@vorpalette:  I don’t think it was so complicated.  We got a realtor (or friend), got referred to a mortgage broker to get a preapporval just as a formality, looked for homes, found one, made an offer, and closed 3 weeks later.

My suggestion is to anaylze your own finances before talking to anyone.  No one will know better what you are comfortable paying than yourself.  They say they are tighter on the loan limit, but I still felt that they were willing to lend MUCH more than I would have felt comfortable with borrowing.  Break it down to a monthly payment you are comfortable paying.  Then work backwards to see what total amount you would be willing to borrow, add in your down payment, subtract 5k (safe estimate) you should have left for closing cost and start up items for the new home to determine what price house you should be looking at.  Then go to a broker and have them crunch their numbers and see how that compares. 

when you finally find a house you like and want to do an offer, your agent and mortgage broker should be able to walk you through the process.. and it’s all just paper work.  dont worry about that part… I think the only thing you really need to worry about is determinig how much you can comfortably spend.

Post # 10
Member
1572 posts
Bumble bee

Yep, no worries, the mortgage broker and realtor will give you allll the details for your specific state. 🙂 I’m a first-time home buyer, too, and they actually gave me a step-by-step list of the process for buying a house. If all goes well, we close April 5th!

Best of luck to you!

Post # 12
Member
5423 posts
Bee Keeper
  • Wedding: November 2012

First thigns first.  Figure out what you can afford.  Do not rely on someone else to tell you.  There are tons of online tools that can help you determine what your monthly payment should be around (of course you may want it lower which is fine).  From there, determine how much cash you have on hand and that will give you your overall budget. 

We never did a preapproal.  We bought our first house 6 months ago.  We told the bank here’s the house we want and they said ok.  We did put about $8k more down than we wanted to because we couldn’t get any sellers assist since they were underwater.  Make sure you pick a realtor that will really work for you.  Ours was wonderful when we needed him, eventhough we did a lot of work.  You’re only a first timer once.  Good luck!

Post # 13
Member
7311 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

The best thing I can tell you was also the absolute hardest thing for me to learn by experience….. Do not get attached. Ever. Real estate is can be an emotional roller coaster. The biggest favor you can do fopr yourself is to stay emotionally detached from the process. Buying a house is a business transaction, and a rather large one at that. The more you treat it as business, the better for your emotional and mental wellbeing.

Post # 14
Member
8446 posts
Bumble Beekeeper
  • Wedding: April 2013

@vorpalette:  Oh I forgot to mention, the extra fees.  We actually had a few of ours waived because Fiance works for our lender, but we had to have a home inspector ($300) and a termite guy ($100) come in and inspect.  Our home was fairly new (about 10 yrs), so there wasn’t much to fix.  You will also need “good faith” money before you start the closing process, but this gets credited to your downpayment.  Basically, this tells the seller that you’re serious and no other offers will be accepted on the house.  You will get an estimate from your lender before closing that will list all of the fees, our closing was about 2% of our purchase price, but was paid by the seller (definitely something to think about during the negotiations to keep more money in your pocket).  There were filing fees, a fee for the deed, as well as homeowners ins and tax that were all prorated and added to our downpayment cost. 

Post # 16
Member
1210 posts
Bumble bee

@vorpalette:  I got preapproved (no big deal, just some minor paperwork), found a realtor who I LOVED, and it took me about 6 months to find a place I also loved. I would suggest also finding a real estate lawyer at this time if its something you are interested in having (I did and thought it was $500 well spent)

 

The big pains are after you put in your offer. The realtor is very knowledgeable and will walk you through how to put in your offers and through the negiotiations process. If you have an attorney, they can help as well with drafting the offers and contingencies. Bring a checkbook with you – your realtor might want you to write a check for a small amount ($3-5k) to show you are serious when offering. Once your offer is accepted, your bank will likely become a huge pain in the behind. Here is my advice:

 

1. Don’t make any major purchases while home-shopping. I had to account for every deposit/withdrawal over $250 from my accounts. That is a lot of paper trails/receipts. Every paycheck stub, every purchase, every transfer from other accounts. Its a lot. 

2. Make copies of EVERYTHING. My bank had me submit the same paperwork over and over. It was easier to maintain a file and just refax everything over than try to find stuff again.

3. The bank will pre-approve you for the very maximum they think you can pay. They don’t take into account the fact you likely will want to eat out at restaurants or take vacations in the future. Take this into consideration when deciding how much home you can truly afford based on the lifestyle you want to live.

4. Your mortgage payment will go UP. This is because most banks hold your taxes/insurance money in escrow and bundle it as part of your mortgage payment. My taxes just increase every year (im sure most peoples do) and my mortgage went up $100/month last year, which was substantial. This also ties into #3 because you don’t want to be at your payment limit with your  mortgage and then have an unexpected tax increase.

5. Prepare for you or your Darling Husband to take some time off work during the process. Your realtor will work on evenings/weekends, but your inspection likely will need to happen on a weekday during the day. Also, your closing will happen during the day too. So have some days available to take off and its extra helpful if you/DH can be flexible with the times.

6. Maintain a certain amount of cash on hand (don’t empty your bank acct with the down payment). You will need it after the purchase. Even if you don’t think you do. Homeownership has a lot of costs associated with it, and its nice to have the cushion and avoid financial stressors.

6. Its a very emotional process. I cried a lot. Maybe thats just me though 😉

 

Good luck to you! You will find the perfect house in no time =) Let me know if you have any other specific questions!

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