The Home-buying Adventure, part 4: Getting a mortgage

I feel like the posting of the picture earlier this week may have implied we've closed on a house and are about to move. We haven't. We're still in the midst of this home-buying process, learning all the way. A week ago Thursday was a milestone: signing mortgage papers.

This is part four of our house-buying adventure. See part 1, about the houses we were shown by our realtor, part 2 about how we filtered the choices, part 3 about signing the purchase agreement, as well as our Dreaming phase, and our careful and thoughtful goal.

I feel silly to admit this, but I've been married a year and I'm still not signing my new last name very fluidly. It surely has to do with the fact that, thanks to switching elementary schools, I was never properly taught cursive writing, so I don't write anything in cursive fluidly without a lot of practice. Anyway, that said, there's a lot of papers to sign when applying for a mortgage, and my slow-signing didn't help matters.

Let me rewind the story a little bit. When we were carefully and thoughtfully starting this process, we went to talk to a mortgage guy to get a preapproval letter, before going house-hunting. At that meeting, the mortgage guy mentioned a first-time homebuyer program through Indiana's Housing and Community Development Authority. The program is available for first-time buyers who have a household income less than the average for the county they're buying in, and, luckily we're two young people new to the work world and happen to be house-hunting in the richest county in the state, so we (just barely) qualify for that criteria. The benefits of the program: a 30-year, fixed rate loan, an interest rate about a percentage below what we'd get otherwise, no points to pay, no early-payoff penalties, and the mortgage won't be sold willy-nilly to other banks and investment companies: Exactly what we were looking for. I'm not sure how to find out about programs about this in other states. The best things I can suggest- ask! And, do your own research!

We set a very firm price range when house-hunting, and it was very conservative compared to the "normal" debt-to-income ratio. When it was all said and done, our principal and interest payment will be ten dollars more than our current rent payment. Don't let that number fool you, however! The "With This House, Your Monthly Payment Will Be" number displayed on real estate sites is NOT the end of the story, nor is it accurate! We learned all about house insurance, mortgage insurance, and tax payments that will happen along with the mortgage payment every month, adding about $200 to the base payment. This is something we planned for, but not something that the real estate sites make obvious using their 'calculators'.

So, last Thursday, we signed a lot of papers (including an unexpected one, based on the Patriot Act. Apparently the government doesn't want terrorists buying houses.). They can't actually get sent off to be approved until we have the inspection (done Tuesday) and appraisal done, and an accurate house-insurance quote (based on the inspection and appraisal). More steps. But progress is being made! Hooray!

Keep a lookout for more Home-Buying Series entries to come! The series will at least run another couple months, because closing won't be before then. And I anticipate more Adventures!

No comments:


Blog Widget by LinkWithin