About 3 years ago, my husband and I bought our first home. Prior to that, I knew very little about the home buying process, mortgage loans, homeowner’s insurance, etc. I had worked briefly for a bank and used some professional knowledge to navigate the process, but I ended up doing a ton of research anyway.
Because I know a bit about the customer service side of banking, friends and family sometimes ask me for my input. I am by trade a writing major, so it still surprises me 1) when I am asked for my thoughts on home buying and insurance and 2) when I actually have plenty to say. Yesterday, my aunt asked me to give her some tips for my cousin. I started out typing a short list and ended up with a 4-page essay in a Facebook message. (sorry, Auntie! 🙂 )
I figured it might be helpful to share those thoughts on the home buying process with you all. My caveat is that this does not constitute licensed professional/financial advice. These are simply things I have observed as a consumer. Here are 8 1/2 things no one told me before buying a home:
1. Get ready to fill out a ton of paperwork.
Banks will want any applicable employment information including copies of pay stubs, back at least 3-6 months., and they may ask for letters explaining unemployment. They will want statements for all bank accounts you have, even if you are taking out a mortgage with the same bank you hold checking/savings accounts with. Be upfront and give them what they ask for, otherwise the process is really long and tedious.
2. Apply for mortgage loan pre-approval strategically.
Get all your quotes from different banks within 14-45 days; the hard inquiries into your credit report will usually register as one inquiry instead of several. Spreading out the inquiries over months can mean drops in your credit score, which in turn negatively affect the interest rate the bank will offer you.
3. Get your finances in order.
Bring as many of your accounts up to good standing as possible. If you can pay off any debt you have, that will contribute to how much the bank is willing to loan you. Even if you just knock off smaller debts, anything you can lower is helpful. Why?
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dara t. mathis 