The secret is out! WE BOUGHT A HOUSE!! *happy dance* While buying a house has been on our list of goals for some time, we underestimated the process of buying a house and frankly didn’t know what we were doing. Which is why I am writing this – all the things I didn’t know we needed to buy a house!
1. Find *the* house – seems sort of ridiculous to point out the obvious, BUT while we wanted a house we were not actually shopping for a house when our now home became available. Had we known we were actively shopping I would have had more of this put together but we did this on the fly. Point is, when you pick your house – make sure it is THE house. House buying is a stressful process, but thinking back and looking at pictures of OUR future house made it all worth it.
2. Choose a Real Estate Agent – our house was a private sale so I am going to skip this part because I had no experience with it, but there were times I wished we had an agent to help us navigate some of the paperwork we had to go through!
3. Choose a Bank (INTEREST RATES MATTER) – We started with a local bank we trusted but to be completely transparent there were a couple of missteps on their end which resulted in us getting false information and a lot of frustration. We pursued an online bank and saved over $300,000 in hidden fees and monthly rates. While shopping for interest rates a couple questions that quite literally saved us thousands of dollars were:
- Why do your customers pay the points over a higher interest rate? WHY is it worth me paying the points up front at closing? How much will it save me at the end of my loan? When is my break-even point? (You can figure out your own break even point by using this calculation but I had each bank do it as well to compare my math)
- Total Cost of Mortgage Points / Monthly Cost Savings = Break Even Point Calculation
- Find out if you are paying for Origination or Discount points
- I had each representative give me estimated prices for 3 interest rates with 2 different down payments. I compared these to the cost of points to find our best rate both monthly and at the end of our loan term.
- ASK WHAT TYPE OF LOAN THEY ARE OFFERING. (Fixed rate worked best for us in today’s market but be cautious of adjustable rates as they will fluctuate after your ‘fixed’ time is up)
4. Lock in your Interest Rate – One thing I did not expect was to have to PAY to lock in my interest rate. This cute $550 payment guaranteed our interest rate for 45 days and is deducted at closing – phew! I was able to negotiate out interest rate with the bank *BIG HAPPY DANCE* and was fortunate to work with a bank willing to work with us.
5. ALL THE THINGS – This section might be a little overwhelming but I promise it is better to know upfront what you will need than to be scrambling finding all this paperwork while you’re in the middle of this process. Our bank has an interactive to do list which helped streamline, prioritize and organize everything we needed! Without further ado, in no particular order:
- Purchase & Sales Agreement
- Title Company (Find, Choose & Open an order)
- Employer Contact Info
- Education Details
- Home Insurance (Shop, Choose, Purchase)
- College Transcripts & Diploma
- Last 5 years of employment history
- Annual Bank Statements
- Bank Account info for account used in this transaction
- Retirement Account Annual Statements
- Investment Account Annual Statements
- Two years worth of W-2s
- Two years worth of Tax Returns
- Proof of deposit (your bank should photocopy checks you will need a copy showing it was cashed by the seller)
- You will sign a gazillion papers and releases
- State & Federal Paperwork
- Confirm mailing & current physical addresses
- Proof of funds
- Down Payment info
*depending on the type of loan you may need to provide more documents but this was the gist of what we had to provide!
6. Closing – the day is finally here! The day you become a homeowner! The literally days of your life talking to and dealing with banks or paperwork has finally paid off! As we were a private sale I am not sure how this compares to closing day when you have a realestate agent, BUT our closing day looked like this: We met the seller and the notary at a lawyers office, we signed what felt like a million pages and that was it. Rather anticlimactic but it did in fact seal the deal and we left homeowners with a fat stack of signed paperwork! It took about an hour and 45 minutes to get through all of the paperwork.
*fun fact: we needed two forms of identification* which I forgot and we had to run back befor closing to get it hahaha.
The home buying process is one to remember! It is filled with mixed emotions, happiness, excitement, pride and honestly a little fear. It is a massive commitment and responsibility. It is also something that’ll bring joy and memories to your life! As stressful as the buying process could be at times, I promise it is worth it.
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