carefully & thoughtfully

This week was exciting, in a way. We emailed a Realtor (Realtor is a trademarked name. What's the generic name? real estate broker? agent? This is like the 'Kleenex' vs 'tissue' technicality. We're going to stick with the shorter name. Realtor.) and he was on vacation, but gave us a good starting place: getting pre-approved for a mortgage. We didn't exactly know what this meant, entirely, but we were going to do it!

We met with a mortgage guy (agent? banker? I don't know. I should pull out his card.) on Wednesday, and he was very helpful. He walked us through all the costs involved with buying a home- not including things like upkeep & utilities, but including things like insurance, mortgage insurance, assessor fees, inspector fees, and other closing costs. He showed us calculations that indicated what our monthly costs and closing costs would be for different house price points and down payment amounts. I very much appreciated the patient explanation, and I expect that we'll be jumping into this house-search thing within a couple weeks. We have months to find a house- we're in no rush at all- so I want to go about things the right way. We're being as careful and thought-out as we can be.

It was encouraging to hear from a professional that we're doing things right. He says in recent years, most first-time homebuyers have come with no down payment, and we're hoping to have 10% saved. He sounded surprised as he looked down our credit report and saw the only debt we have is student loans. We don't have (or ever want!) a car payment. We don't carry credit card debt- heck, the only credit card in my name, I haven't used in over a year. We still have it open solely because its the only credit I have, Period. Yesterday we met with our insurance lady- she wanted to review with us the coverage we have currently (and probably try to sell us some more...) and, after talking to us and finding out we are funding both a Roth IRA & a 401k, she said "I wish all twenty-three-year-olds were doing what you're doing. It looks like you guys are doing everything right."

We're trying really hard to go about this personal-finance thing thoughtfully and correctly. We'll see how the experiment goes. In the meantime, Thank You, Dave Ramsey!


Matt said...

Just a suggestions having been through this process twice now. Make sure whomever you buy your mortgage from is going to keep it. The mortgage on our second house was sold to a great company but we were lucky. We have been with both Chase and Countrywide and they keep their mortgages. Your rate will be about the same no matter who you finance through so research your mortgage holder.

Brett said...

Congrats! Most importantly, congrats on approaching the house thing so responsibly. It's a good feeling to pleasantly surprise someone when they see your credit report.

As for the mortgage thing, I've found that they get "sold" on a fairly regular basis. In fact, we've had one that got sold multiple times. From what I've seen, it doesn't change your rate or your payment (as long as your on time with your payments). It does mean you have someone else to call if there's a problem and it changes the customer service aspect of the mortgage. But I try not to talk with them any more than I have to, anyway.

It sounds like the mortgage guy mentioned PMI if you're looking at a loan w/o the 20% down. It's good that they were upfront about that but it's still a silly thing...the buyer pays money to protect the lender in the event that the buyer doesn't pay back the loan. Crazy.

Watch out for the points, too. I don't know much about them but I think it's basically pre-paying interest. I'm pretty sure Dave Ramsey isn't fond of them.

Good luck.


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