So – homeownership is no joke. There’s the moving, and the unpacking, and the yard mowing, and the door locking (so many doors), and the trash days, and the painting, and the still unpacking, and the neighbors, and the not feeling like home, and the trying to live life while still, still unpacking. We’ve been here about 2 weeks now, and I can’t believe time is passing so quickly!
There is so much responsibility that comes with owning a home, but it’s also exciting to plan out projects and new ways to make it our own. Overall, I think it was definitely worth the turmoil of the home-buying process, but ask me again when our first mortgage payment is due and we keep having to shell out all the money for projects. Looking back on that process, there are definitely some things I wish we were prepared for as first time homebuyers.
1. Before looking at houses, meet with your realtor to discuss future expenses and go over the entire home buying process.
None of this was ever explained to us. I’m not sure if that’s common, or if it was just our situation, but we were constantly asking questions and never getting complete answers. My husband’s father is a real estate agent, and for some reason our real estate agents assumed we knew every step of the process because of that, which wasn’t true. Sometimes it was difficult to communicate over email and I wish we had been better set up for the entire process from the beginning.
2. Make sure both of your names are on the contract and the loan application if you’re married.
I actually haven’t heard of this happening to anyone else, but it happened to me, so I assume it could happen to you. We only put my husband’s name and information on the loan application because we only wanted to be preapproved for one income. Plus I had quit my job and my taxes weren’t ready to be filed and I didn’t have any notable income anyways, so we just didn’t want to mess with it.
Then when we put in our first offer, my name wasn’t on the contract at all. I asked my husband why I wasn’t signing anything and if we should have that corrected, but we had already waited an entire day for our offer letter to be drafted anyways and didn’t want to take any more time, so we let it go. I didn’t think it would matter. Then when it was time to close on the house, I found out my name wasn’t going to be on anything.
I contacted the loan officer, the real estate agents and the title company and they all told me that it didn’t matter because as a married person, I still have rights to the house. But guess what, it does matter. If Will is personally sued and my name isn’t on the house, it could easily be taken, whereas if my name is on it, that makes it a little more complicated. If God forbid Will dies, the home will go to probate and will be a lot of extra time and headache to ensure that I get the home. But here’s the kicker, even though my name isn’t on the loan or the house and I would have to fight for my rights to the house, if for some reason he can’t make payments, the bank will still come to me for them because we are married. I don’t expect any of those situations to happen, but who does? We are still sorting this out and will have extra expenses associated with adding my name to the deed. Bottom line, make sure both of your names are on everything.
3. Make sure you know exactly what will happen when your offer is accepted.
I’m not sure if this is the same everywhere, but we were unaware of the immediate costs of agreeing to a contract. Hopefully your realtor will let you know these things before you even start looking at houses, but just in case, you may want to ask. The week after our offer was accepted, our realtors contacted us about $1000 of earnest money + $1500 of deposits that were required immediately for inspections and various deposits. We were under the impression that most of these were due on the closing date which was set for 2.5 months away. It’s not that we weren’t able to afford them, it was just frustrating to not be able to plan for that because we weren’t informed. Then we had to ask multiple times if this would come out of the total expected closing costs, and never got a real answer until the day of closing when they told us what we still owed. Fortunately, we owed very little at the actual closing because we paid so much of it up front. But be better than us and do your own research and make sure your realtor explains these things ahead of time.
4. Interest rates (among other things) can really change the amount of mortgage payment.
We had so many people who weren’t experts trying to tell us how much our monthly payment would be for the price of house we bought. It turned out they were all wrong. Most thought we would be paying a much higher monthly rate than we are, and it turns out we will be paying about the same amount we paid in rent for our last apartment. Don’t use this as an excuse to buy a house you can’t afford, but just take it as advice to trust the experts and their numbers and not your best friend’s guesstimate based on their current mortgage payment.
5. Research different types of loans available to you.
Because of my husband’s military service, we were able to take out a VA loan. This was beneficial to us because it doesn’t require a minimum downpayment amount and you aren’t required to carry Private Mortgage Insurance. There was a fee tacked onto our loan because it was a VA loan, so be sure to do your research to decide which type of loan is the best fit for you.
6. Make sure you understand everything you’re signing.
All of the people we were working with seemed annoyed that we requested that every little thing we signed was explained, but we had no idea how any of this works. Based on their reactions, I’m sure it’s common that people sign their lives away without a second thought, but don’t be one of those people! Realtors, loan officers and title companies make mistakes, so you may find some in your contract if you pay attention to all of it. Our realtors misunderstood us once and submitted an offer on a home that was a few thousand OVER the asking price. Thankfully we were able to retract that offer and kept searching for another home.
I am definitely not an expert and have no training in real estate, but I still think you can learn a lot from our mistakes. I did not consider our home-buying experience enjoyable and we will be approaching it with much more wisdom next time.
What are some struggles you encountered when buying a house and what will you do differently next time?