Process of buying our first house
Updated: Apr 21, 2023
This post will be the dump of the process of buying our first house!
Updates
Wednesday, October 19, 2022 - The Start!
Some websites that I looked at on 9/16/22 to get the process started:
Right now we pay about $1,100 for our one bedroom apartment, my guesstimate was that we can afford $1,700/month comfortably (being about 28% of our monthly gross income). There's also this mortgage calculator that could be useful - https://www.investopedia.com/mortgage-calculator-5084794.
We currently have about $8,500 saved. Applying for the mortgage was actually pretty easy. We applied at US Bank and Wings Financial (a local credit union) on 9/29/2022. Wings Financial was a little quicker at responding, and in my opinion, seemed more personal. US Bank was definitely more annoyingly persistent with random loan officers calling me every 2 hours and many update emails. Wings Financial was simple, and they only contacted me once and sent me emails like a normal person.
Submitting the documents that they needed was a quick online process for both, and they both sent the information about the approval a couple days after. Wings Financial approved for more ($370k) and they had a lower APR along with some good options for mortgages and home buying. They have a program where you get cashback for working with one of their partner real estate agents. US Bank approved for $305k, and still after I was approved and talked to one of the loan officers, a couple of the other loan officers still continued to email me which was quite annoying. At this point, I'm leaning towards getting our mortgage from Wings Financial, but that might not be for a while.
The loan officers I worked with from both companies were very helpful, and one thing I've come to understand is that it's best if the 3% down payment comes from your pocket (if this is wrong, please let me know and give me any suggestions), and then on top of that closing cost is about another 3% so that's about $20,000 on hand. We definitely don't have that right now.
For the next months we'll be focusing on saving money. Once we have $18,000, I think it's safe to start looking. I spoke with my aunt and mom about this too. My mom said that houses are way too expensive right now along with very high interest rates too (we're looking at 5.5-7%), but they should be lower next year (hopefully). Their current rate for their home is only 2.8%, which is such a HUGE difference. They also mentioned to do a conventional loan over an FHA loan because a conventional loan will be more easily accepted during the approval process than an FHA loan. Wings Financial updates their page with their rates, so we can watch this page to see when/if it drops: https://www.wingsfinancial.com/mortgage-loans.
Maybe we'll go to some open houses and try to determine what we want in a home (: I'll do my best to keep this updated on how saving is going and anything else!
Right now where I think this will come from:
Spending less of our income ($500/month)
Selling MTG cards, etc. ($4k)
Company RSUs (about $2k)
Student loan refund ($6k, only if necessary, otherwise this is going towards my private student loans)
I'm hoping we can start looking in the spring around March/April!
Friday, April 21, 2023
I've totally forgotten about this post. A lot has happened since the first update. We decided to go with Wings for our mortgage, and they also have a deal with a Realtor program so we went with a Realtor from their program.
January 14th - We started the process of setting up a meeting beginning of December, but with the holidays we decided not to meet until January 14th. She met with us and went over the buyer timeline and other expectations of the buyer and realtor relationship. We provided details about what we're looking for. We decided to go with her as our realtor and signed the buyer rep and agency form around January 17th, when we were able to start searching for houses on their MLS.
January 25th - We scheduled our first day to look at houses!
February 1st - We had to re-submit our documents for pre-approval again with Wings since it had been over 3 months. The pre-approval was again a very quick process.
February 4th - We looked at our first 3 houses! Which were all a No.
February 8th - We looked at another 3 houses, and one was almost a yes.
February 11th - We looked at 6 houses, 3 were good but none were still good enough to make an offer on.
March 7th - Looked at 2 houses
March 14th - Looked at another 2 houses
March 24th - We looked at another 3 houses.
April 14th - We looked at 3 houses and they were ALL good. We finally made an offer - we learned that you can only make one offer at a time so we made it on the one we wanted most. We went $10k over the sale price, waived the inspection, and added a $4k appraisal gap coverage. I had to do so much research into this to make sure I understood it right and it was lowkey kind of stressful, but it was good to experience. We got in the top 3 and raised 10k to 15k. It wasn't good enough and we didn't get it, but I guess it would have been crazy if we got the first house we bid on. I wish 3 good ones didn't have to all be on sale the same weekend.
It's definitely been a process and has taken over a lot of our time, but I'm excited to find our home :) I'm kind of tired of looking and a bit anxious, but as they say, good things take time. We've looked at some pretty crazy houses, and the market is wild right now. All good houses are pretty much gone the day they're put on the market. Tomorrow we're looking at 2 more, hopefully one is good! There was another one we wanted to see that just went on the market today, but they already got an offer that they said they couldn't refuse.
Hoping that everything turns out well at the end and that we're able to find one and move into it before the end of June!
