10 Things I Learned When Buying My First Home
My partner and I had been in the house not more than five minutes before I turned to our real estate agent and said this—practically yelled it.
The house was a tall, two-story affair that was almost 100-years old. I’d seen the French doors and old growth timber floors online, but they looked better in person. So, I turned to our agent and made my proclamation.
I thought she’d turn to me and yell “Sold!”, we’d high five and be able to move in the next day. But, as I’d learn over the next few weeks, buying your first house is never as easy as saying “we’ll take it.”
There’s a lot of home buying advice out there, and everyone who’s been through the process learns something different. Here are the 10 things I learned when buying my first home.
1. Finding the Right Mortgage
Mortgages can be complicated and there are a lot of options. While you’re looking for the right house, you should also consider looking for the right mortgage loan. Depending on the loan program you choose, you’ll likely have options on which financial institution you want to work with.
2. Getting Pre-Qualified
Getting pre-qualified can help you understand just how much you may be able to buy. While getting pre-qualified isn’t a loan approval, it can give you a good idea of how much mortgage you are eligible to borrow.
Usually, it’s a relatively fast process and often you can complete it online. It will give you a ballpark figure to work with and help you take the first step in establishing your lender relationship. Some lenders may do an initial soft credit pull which means you can gather all this preliminary information without affecting your credit score.
3. Getting Your Papers in Order
Do you know where your last two years of tax returns are? How ‘bout your W-9’s? The addresses of everywhere you’ve lived for the last two years? I didn’t either when I started the home buying process.
For most loan programs, you’re going to be asked to provide documentation for all of your income, so start getting that ready first. Have a mistake on your credit report? Start putting together docs that will address that now too.
4. Auditioning Realtors, All of Them
A good real estate agent can help you find new houses and condos that are just about to be listed. They should know the neighborhoods and surrounding communities well and they usually have extensive networks of inspectors and contractors.
Listen to the way they talk about your city and the areas in it. Are they passionate? Are they knowledgeable? Are they interested in what you are looking for, and what is important to you in a home and community? Do they seem like they care? This is a big decision, so it may be worth talking to multiple agents before making a choice.
5. Talking to Homeowners You Already Know
I talked to every homeowner I knew before I bought a house. What happened? What was unexpected? Who did your inspection? Who was your real estate agent? There is a lot of home buying advice out there to help you know if you’re really ready to buy a home. But sometimes the best advice can come from your friends and family who’ve already pulled the trigger.
6. Doing Even More Research
There’s no such thing as too much research when it comes to buying your first home. I read every single home buyer’s guide I could find, but I still felt lost, confused and overwhelmed. Read, read, read and read some more. Get to know the market you’re searching. Take your searches into the real world.
Walk by that house you love at 10 p.m. Go to restaurants in the neighborhoods you like. See someone outside near a house you like? Ask them how they like living there. Chances are they’re going to remember their own first home buying experience and will be happy to answer your questions.
7. Believing in Yourself
It sounds hokey, but it’s true. It’s easy to bail on the whole house buying thing. My “dream house” was bought out from under me and I almost quit. Then I almost got buried under paperwork and gave up. But, I didn’t and today I’m sitting in a home with old floors and French doors.
You can do this thing! It may be challenging, even with all the best advice and research on buying a home. It’s going to feel endless. It may feel invasive. But, it is a thing you can do.
8. Saving More Than You Think You Might Need
If there is a universal truth of house buying, it is this: you are always going to need more money than you think you will—both for home buying and for home owning. Closing costs may be more than you were anticipating, or any number of issues can come up. A toilet will break. A new roof will be needed. A water main will need to be repaired.
Advice on buying a home almost always includes saving a little more money, especially advice for first time homebuyers.
9. Water is the Enemy
I learned this one the hard way, but owning a home is also entering into the age-old struggle against weather proofing – moisture, precipitation, and heavy rains.
Make sure you get a good look at the gutters on any house you’re thinking about buying, even if you have to bring a stepladder to an open house. The Insurance Information Institute estimates that one in 50 houses will suffer water damage every year. So make sure your gutters are intact, there’s no moisture in the basement, and your favorite house doesn’t flood when it rains. You may find it worth it to have a home inspection before lifting loan contingency to be sure the house is physically sound.
10. Understanding the Tradeoffs of Buying New vs. Old
Are you a DIY’er with excellent Youtube search skills, patience, and an extensive tool collection? Saving a few grand on an older house is probably for you. If you’re not up to learning the finer points of hanging sheetrock after a water leak, you may want to look for something newer.
Older houses might seem like a bargain at first, but if they are not upgraded they may have deferred maintenance, which can mean more money for repairs (unfortunately, houses don’t come with a landlord to call when something breaks.
You have to fix it or pay someone to do it). With a new home, you may pay more in purchase price up front. Ideally, though, the home should come with fewer eccentricities than an older house.
It’s also important to keep in mind that not all homes are eligible for financing. You may have a harder time finding financing for older homes and fixer uppers under certain conditions.
Making Your Homeownership Dreams a Reality with SoFi
Buying your first home is a huge deal. It could end up being a long and involved process. There will be days when it doesn’t seem worth it and days when it feels like it’s never going to work.
A lot of those feelings go away after you start to settle into your new home, maybe paint a wall or complete the first project that really makes the house that taught you so much feel like a home.
Take a step back, try not to get drawn in by French doors, and enjoy taking this major life step. You can get started on step one today by checking out SoFi’s mortgage loan options. With SoFi, there are competitive rates, no hidden fees, and you need as little as 10% down.
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