THINGS TO KNOW BEFORE BUYING A HOUSE:
1. MAKE SURE YOU ARE REALLY GOING TO QUALIFY FOR A LOAN
When my husband and I first went to the bank, we got prequalified for a home loan, no problem. We gave them all our employment information, our bank accounts and information and went on our merry way. Fast forward to about 30 houses and a couple months later, we were all settled on a home, under contract, and everything was rosy. OR SO WE THOUGHT. 1 week. Let me repeat, 1 WEEK before our closing date on our first home, the bank calls us in to let us know that they can't give us a loan anymore. 1 WEEK.
Turns out, if you are self-employed (which my husband is) you have to have 2 YEARS of self employment history in order to be able to qualify for a home loan. Well, we didn't have 2 years of self employment history so we did not qualify for a home loan. BUT, how did the bank miss that or neglect to tell us??!! Total negligence on their part. Lucky for us, we found a credit union that was willing to work with us, and it all got worked out.
Moral of the story - They are the professionals and SHOULD HAVE CAUGHT THAT. I don't know how they missed it, but they did. They almost cost us the house. BUT my point is that we should have been aware of that law!! So DO YOUR DUE DILIGENCE! You can't leave everything up to the professionals because sometimes, even they miss it.
2. MAKE SURE YOUR REALTOR IS ON YOUR SIDE
We moved to a small town. Like, REALLY small. I'm talking under 10,000 people. In small towns like that everybody knows EVERYBODY. Shop around for a realtor, ask lots of people who they used and why... The realtor we ended up working with came highly recommended. One of the most important things we wanted was to be sure that she would fight for us. Because in a small town, where everybody is friends with everybody, you want someone that will stick up for the new people and not try to swindle us out of a couple bucks.
When we were negotiating, there were some things that we really wanted. We would pass the message onto our realtor and she fought for us until we got exactly what we wanted. She was excellent and totally saved our first-time-home-buying-lives.
3. MAKE SURE YOU HAVE THE CASH FOR UNEXPECTED COSTS!
Initially, when we were working with our first bank, they had given us the rough estimate of the "cash for closing". It includes the down payment (which we were going to do 3%) and the closing costs. Which includes realtor fees, attorney fees, title fees, taxes, etc. We had enough cash for that and all was well.
When that bank decided to suck, and we moved onto the second bank... they had a different idea of how much "cash for closing" we would need. They wanted a 10% down payment and almost 4 times more cash for closing. Luckily we had enough to cover it, but it was much more than we were planning for.. There are lots of hidden fees in closing costs - appraisals, inspections, and the above list. They can add up really quickly, so make sure you have enough cash to cover more than the down payment.
4. DON'T BUY MORE HOUSE THAN YOU CAN AFFORD
This may seem like a no-brainer, but sometimes it's hard to follow. Just because a bank says that you can afford a house that is $$$ expensive doesn't mean that you ACTUALLY CAN. My husband is a good numbers guy, so when we got down to the nitty gritty of monthly payments, we found that the best price range for us was less than half of what we technically qualified for.
Keep in mind that the more expensive the house, the more cash for closing.
I know that some of these are no brainers, but it's all sound advice... from a stressed lunatic. But I give it to you in love, so that you don't become a stressed lunatic.
Happy House Hunting!
xo
Hailey
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