Wednesday, July 6, 2011

Our road to buying a house

Like I said, for awhile we've been wanting a bigger place. Our last house was 1150 sq ft, and 1950's fabulous so very compartmentalized which makes it feel even smaller. Here are pics from 2.5 years ago so you can get an idea. Except for the laundry room and back bathroom, literally every other room is different now.

We lived there for 5 years. We changed around our bedroom multiple times. Turned the office into a John Deere 2nd guest room/office, later found the bed I wanted on Craigslist and made it a shabby chic 2nd bedroom, nursery for Marshall, then changed it again. Then after Marshall was born we changed the guestroom to an office/playroom. Our living room changed configurations about once a quarter. Its an adorable house and we had so much fun working on it but no matter we did, it will always be a tiny house. If Jerad, Marshall, the dogs and I were all in the living room... there was barely any floor space left. Plus we didn't even have a dining room, its more of a "nook." Having people over was hard which is a total bummer because we love to cook and entertain!

Once we decided we would be moving, I spent months pouring over the and credit and mortgage forums. I learned everything there was to know about the house hunting, appraising, inspection, lending, and underwriting processes. I learned what lenders looked for, what we would need, and little ways to boost our credit scores and look more favorable in the eyes of a lender.

Jerad and I spent every night looking at listings figuring out exactly what we liked and didn't like, and getting a feel for our local market. We also wanted to prepare for a bigger payment in advance instead of just signing up for it and hoping we'd be able to manage. We did this by cutting our budget waaaaaaaaay back. We've been following Dave Ramsey for a few years now so I was already micromanaging our budget. We made the decision to get rid of our satellite TV subscription in January, downgrade our internet, sell my car to save on car insurance and a car payment, keep the heat at 58, share a cell phone plan with Jerad's brother, and cut back our grocery bill. As in, for the last 6 months we have been spending $55/wk on groceries.

We decided what the max payment amount we'd be willing to pay was, and started paying that amount into a savings account every month. We did that for 6 months (in addition to paying our other house payment) to be sure that we would be comfortable with it in the long term.

All of our planning paid off, because once we "got serious" things moved very very quickly, and very seamlessly:

3-31: Interviewed Broker, faxed income docs and filled out Application.
4-1: Went through automated underwriting and received Pre-approval letter
4-2: Interviewed and hired Realtor. Looked at first house
4-8: Looked at 3 houses
4-10: Looked at 4 houses and wrote an offer on one
4-11: Realtor submitted offer
4-12: Seller's accepted offer
4-13: Set up Escrow account
4-14: Send Mortgage Broker other docs he needed
5-16: Went to Title Co. and filled out final closing docs
5-19: Got Keys

By doing so much research, we already had a mortgage banker/broker in mind and knew exactly what documents he would need (2 months pay stubs, 2 years taxes and W2's, 2 months bank statements, 2 forms of ID). Since we had everything already, getting the pre-approval went very fast. We wanted him to run our info and app. through automated underwriting and get a really solid approval so we wouldn't be out making offers and just hoping the financing would work itself out.

Since we had been looking for houses on line for MONTHS, and driving around different areas, we had a really good idea of what we wanted and what it would cost us.

The house we ended up putting an offer in on was actually a house that we fell in love with online before even meeting with the Realtor. It was also the last house we looked at. We had tried to see it earlier in the week but the sellers "didn't feel like cleaning" so we had to wait. We saw a few houses that were definite NO's, a few that were okay, and 2 others that we liked as well.

Before we made our offer, we figured out what the taxes and insurance would be and knew what the payment would be and how much it would change for different scenarios (like if they countered for 10k more etc). Even though we LOVED the house, we were perfectly willing to walk away if we weren't going to get the terms we wanted. We put together what we thought was a really strong offer, our Realtor presented it in person, and even though there were other offers as well, our was accepted!

The Broker then drafted our contract which we had 3 days to review and accept. He then ordered the appraisal. We suggested having the appraisal done before the home inspections so that if it came in low we could see if the sellers were willing to renegotiate instead of paying for home inspections and then finding out the appraisal was too low and the loan would never go through. Because the house was so new (2002) and Jerad is such a handy man, we weren't really worried about anything that the home inspection was going to turn up. Luckily the appraisal came in higher than our offer, and there were no major issues with the home inspection.

After the inspection we asked that the sellers patch a hole in one of the bathtubs, replace the missing closet doors in the downstairs bedroom, and have the water softener serviced and repaired. They agreed to do all those things.

I wouldn't call our house buying experience completely stress free, but it was pretty darn close. Our Broker was AMAZING and made the whole process cake. He anticipated and asked for everything the underwriter would need or might want to see so we had time to get it all together in advance instead of scrambling for things at the last minute. The only "surprise" along the way was when the underwriter wanted to see a copy of my finalized divorce paperwork at the last minute. And I had no idea where it was.

Doing our homework really paid off. We got a house that we love, and had fun during the process! Now we just need to finish unpacking someday...

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