Welcome to the fourth installment in my Diary of a First Time Homebuyer. This series is documenting my journey as my husband and I become homeowners for the first time.
If you are just joining me for the first time, you can find the rest of this blog series at the following link:
I knew there was going to be some expenses up front when we began this whole thing. I knew there was going to be a down payment and earnest money, and I was aware that we were going to have to buy some things when we finally found a place and moved in.
There were a few things I was not ready for though.
Like the cost of inspections. I knew we had to get the place looked at, but I was shocked when I was quoted somewhere in the neighborhood of $700 for the inspector’s fees. The loan isn’t even underwritten yet and we are already out of pocket $1798 after the earnest money.
I knew that the realtor made a commission off the sale of the house, what I didn’t know is that the company she works for charges a flat rate of $400 on top of that, that we have to pay out of pocket.
There are also closing costs. Luckily for us, that was a part of our offer, and the seller will be paying the bulk of these for us, but normally, that is something to the tune of $3000, also the responsibility of the buyer.
Don’t get me wrong, I am not complaining at all, and we have the funds to do these things, I just had no idea before we started this process. I guess I was in some little fantasy world thinking that this would be something akin to a glorified auto loan process. Boy, was I so wrong. There is so much to this! You really have to have your ducks in a row when you decide to make this happen in life.
Another thing I wasn’t ready for was the hit my credit rating was going to take during this process. When we applied with our first lender (we shopped around some, so there were a few) my credit score was excellent, and now, less than a month later, as we are waiting for the loan to be underwritten by the lender we ended up going with, it’s plummetting all the way down to fair. I know this is temporary, but it was a shock when I checked my credit karma the other day and saw those numbers in the mid 600’s after I had worked so hard to bring them up to the 750 neighborhood.
You really have to know all the things about your credit situation as well. There was a long list of inquiries that the bank came back with that we had to answer, explaining that hard credit check, and this credit account. They even asked me about an address that showed up on my report that I lived at over 7 years ago, for a couple of months. If that address wouldn’t have been written down in front of me, I could have never told you what it was.
If we are being honest here, I am lucky I got through that inquiry. I never ever would have thought in a million years that I would need to remember or retain records of some of the stuff they asked me.
My advice to any of you who are thinking of taking the plunge and buying your first home? Take some time to really get to know your credit report. Go over everything with a fine tooth comb, and do not open any new credit accounts for at least 3 months before you plan to apply for your loan. Seems like those two little tricks would have made this whole thing a little easier if I had known them.
This whole thing has been a learning experience, and I have a feeling it’s just beginning! This is the biggest, most important and hardest life decision I have ever made. It’s exciting and scary and awesome!
That’s it for today, and thanks for reading! Keep checking back for more as we navigate this adulting win at the beginning of 2019!
Trying to get yourself ready for your own adulting win? You can find out how I fixed my terrible credit in one year by following the link below:
As always, I would love to hear your advice or experiences in the comments! I always love hearing from you!