Jess is one of our graphic designers, and recently went through the gut-wrenching process of almost buying a house. She’s still looking, and here shares a few things she’s learned so far in the process.
Determine your monthly payments up front. It was crucial for us to tell the bank how much we wanted our monthly payments to be in order for them to determine how much they were willing to lend us. We know how much we can pay through monitoring our budget.
Prepare for hassle. I had no idea how crazy the process is. It doesn’t feel like it should be as complicated as it really is. There are all the inspections, and negotiating…it’s like buying a car on steroids.
I also have been pretty surprised about how much can go into the initial negotiation. Our offer hadn’t even been accepted and we went back and forth with the seller so many times. I can’t imagine what was going to happen once the inspection process started.
Shop around for your lender. Different lenders have different rates. There are all kinds of loans out there. I didn’t know there were 15 different types of home loan options! If you buy a house in Philomath [a nearby town], you don’t have to put anything down because it qualifies for a USDA loan, versus your regular conventional loans.
Protect your credit. I learned that one fairly common reason that loans fall through is because the buyer will go out and purchase larger items (washer/dryer, etc.) using an in-store credit card. When they apply for the credit card, the store will check their credit (which will lower the buyer’s credit) and potentially drop their credit too low to qualify for the loan.
Don’t be afraid to walk away. It was difficult to walk away. You start to picture yourself living there and you get excited about it and when it doesn’t work out it can be a bit of a bummer. We knew it was time to walk away when we had offered our maximum willingness to pay. It also became obvious that the sellers were not willing to budge on their bottom line and neither were we.
You should always be prepared to walk away.