Rerun! Since I couldn’t think of a decent topic this month for the newsletter, I’ll bump my six-part Ultimate First-Time Homebuyers Guide. This is a great resource for anyone dipping their toes in the water of homeownership for the first time, or even if it’s just been a while. The guide lives here, or you can read on. Here we go!
Part 1: The Money
Let’s start with the biggest question. Can you afford it? The best way to tackle this question is to dig into your finances and credit so that you can accurately input numbers into an online mortgage calculator. When calculating, make sure you’re putting in estimated taxes, insurance, and homeowners association (HOA) payments.
Tip: Most online listing sites (Zillow, Redfin, etc.) will include the previous year’s property tax for the listing as well as an HOA amount. Use these for your estimates.
Start with the down payment. First of all, it’s a myth that you need 20% down for a home purchase. With a conventional loan, you can put as little as 3% down. There is a catch, of course: you’ll have to pay for PMI (private mortgage insurance), and your interest rate may be higher. A Federal Housing Administration (FHA) loan— which is a good option for those with lower credit scores— requires 3.5% minimum, while Veteran Affairs (VA) and US Department of Agriculture (USDA) loans have no minimum down payment requirement. More about those options in a bit.
If you’ve got thousands of dollars burning a hole in your bank account, there’s not much else you need to do here. You’ll simply move it to the escrow company at closing (more on that later). If the plan is to tap into your retirement accounts or the ever-popular Bank of Mom and Dad, there’s a little more to it and you should discuss these options with a lender or financial advisor early in the process.
Fun Fact: According to the National Association of Realtors, the average first-time buyer puts between 6%-7% down on their home.
Mortgage products come in a number of shapes and sizes, but here are the main ones you’ll be seeing:
Conventional loan: Any loan that is issued by a private lender and not sponsored or guaranteed by the government. These can come in different flavors:
- Fixed rate versus adjustable rate: with a fixed rate loan, your interest rate stays the same for the duration of the loan. An adjustable rate loan will change periodically, although there will be limits on how much and how often it can change.
- Conforming versus non-conforming: A conforming loan fits underwriting standards created by government-sponsored entities (Fannie Mae and Freddie Mac, to keep it simple), which makes the loan eligible to be purchased and resold by Fannie or Freddie on the secondary market. This provides liquidity to lenders so they can write more loans. A non-conforming loan (usually it’s a jumbo loan) can still be sold, but not by one of the government-sponsored entities. It will also have more conservative credit standards.
FHA loan: The Federal Housing Administration guarantees loans written by private lenders, allowing those lenders to give loans with lower underwriting standards (meaning less-qualified buyers can get an FHA loan). To pay for this, the purchaser is required to buy mortgage insurance, which can be rolled into the monthly payment.
VA loan: This is for active duty and veteran service members and their families. A VA loan has no minimum down payment and offers competitive interest rates. Like FHA loans, they are written by private lenders, and the federal guarantee is paid for by a funding fee (which is typically rolled into the loan and financed by the buyer, but will be waived if the veteran has a service-related disability).
USDA loan: In specified rural areas, the US Department of Agriculture guarantees loans for lower-income buyers. Like with VA loans, there is no minimum down payment required and the cost of the guarantee is covered by both an upfront fee and an annual fee (paid on a monthly basis).
Fun Fact: Roughly three-quarters of all home sales are done with a conventional loan.
Next, consider your credit scores. If they need improvement, it may be in your interest to work on those before starting the home-buying process. In general, you’ll want those scores to be at least 620 to qualify for a conventional loan. At 580, you can qualify for an FHA loan with a 3.5% down payment, and from 500-579 you can (theoretically) get an FHA loan with a 10% or higher down payment. That being said, the lower your scores are, the harder it will be to find a lender willing to lend to you, and the rate could be higher.
The lender is going to look at your income, employment history, assets, debts, and credit scores. They will calculate your debt-to-income (DTI) ratio by adding your monthly recurring debt payments together— such as car payments, credit cards balances, and including your expected housing costs— and dividing them by your monthly income. A good target DTI percentage is 43%, but lenders will often allow you to go higher than that.
To start seriously shopping for a house, you’ll need a loan pre-approval. This will be a cursory look at your finances to determine how much a lender is willing to lend you, and on what terms. When you’re ready to get a pre-approval, your lender will ask for your previous two years of tax returns and two of your most recent pay stubs. They’ll also want to see a minimum of two years of work history in your current job or profession. There are options available for those whose circumstances don’t fit neatly into all of these boxes, but for most borrowers, these are the requirements. Once you’re pre-approved, you’ll have a letter in hand from your lender that you can submit with any offers.
Tip: You can get pre-approved by multiple lenders without doing damage to your credit scores. There will be a credit pull for the first inquiry, but others after that won’t count against you since multiple inquiries within a 30-day window are allowed without impact to your credit scores.
How to find a lender? Mortgage lenders fall generally into these categories:
- Independent lenders: these will have a local presence and offer more hand-holding and superior customer service. Look for companies like Guild, Fairway, or others that have “mortgage” in the name of the company and an office nearby.
- Large retail lender: big banks like Chase, Bank of America, etc.
- Credit unions: since they’re non-profit, they tend to offer very competitive rates and a wider range of loan products.
- Online lenders: Rocket, Better, or any number of other companies whose name you see in TV commercials or on a stadium.
- Mortgage brokers: a broker works independently of any company and is able to shop multiple lenders to find you the best product and price.
Tip: Credit reporting agencies make money by selling you as a lead to lenders. About 30 days or so before you start loan shopping, go to optoutprescreen.com so that you don’t get flooded with calls and emails from lenders soliciting your business.
There is crossover between some of the above, and there are pros and cons associated with each type of financial source. As a first-time homebuyer, your goal should be to find the one that offers knowledge, communication, expertise, and competitive pricing. The knowledge and communication are important so that you’re comfortable asking any questions you have and getting clear, prompt answers, while their expertise means you don’t have to worry about getting to the finish line once you’re in contract on a house. For your first time out, at least, it’s advisable to deal with a real person who knows your name and details rather than a call center.
Tip: Interest rates change every day, so when comparing lender rates, try to get them all around the same time. Also, compare fees and closing costs— they might be used to cover up a low rate by tacking on higher fees. That being said, you won’t know your exact interest rate until you’re in contract on a house; everything leading up to that point is a snapshot in time.
Before you’re ready to put that pre-approval into action, your lender will give you a worksheet that details not just your estimated interest rate and monthly payment but the various fees and costs associated with your loan. These are referred to as closing costs, and most will be due at closing along with your down payment. Some are fixed costs (like appraisal, underwriting fees, and title insurance); others might be percentages of the sale price or loan, like transfer taxes, or discount points (prepaid interest); and others might be based on the time of year that you are purchasing the house and how far into the property tax year you are. In Oregon, the fiscal year runs from July 1 to June 30 and property taxes are due in November. This means that any taxes paid in advance by the seller will be rebated back to them by you. While there are too many variables to properly calculate closing costs, figure 1%-5% of the purchase price for now. Once you’ve found a house, you’ll be able to make a much more specific estimate.
Tip: Have your lender go line- by- line over the estimated closing costs so you know exactly what you’re paying for. There are plenty of samples online to use for comparison.
Part 2: Finding a Realtor
You can find a lender first or a Realtor first, it doesn’t matter very much. A lender can refer you to a Realtor and vice versa. Here are some tips on finding a Realtor to represent you, and what that person’s job entails.
Tip: The terms Realtor, real estate broker, real estate agent, and buyer’s agent are— for your purposes— largely synonymous. There are some differences but there’s no need to get into those weeds.
The buyer’s agent in a home search has a fiduciary duty owed to their client, which means that they advocate solely for you. Think of it like going into court with a lawyer by your side. Their job is to educate you on the process, provide market data, give professional advice, offer referrals to other professionals (like inspectors and contractors), and negotiate on your behalf with sellers and their representatives. Also, they see houses with you and use their set of eyes to point out things you might not be noticing for yourself. Ultimately, though, this representative works at your direction, and as long as they’re not being asked to do something illegal or unethical, they are bound to do it.
Tip: The fiduciary duty cited above has six specific components, which use the acronym OLD CAR to signify each one. Read more about those six components here.
As of August 2024, Realtors are required to enter into Buyer Representation Agreements with their clients prior to doing any substantive real estate work, like showing houses. These agreements outline the responsibilities of both parties, the duration of the working arrangement, and what compensation will be owed by the buyer to their agent for their services. The agreed-upon compensation may not have to come out of the buyer’s pocket though. Some or all of the fees may come from a seller contribution, or negotiated in a purchase agreement, or added to the financing of the home. Whichever way it happens, the buyer doesn’t have to get stuck with a bill they don’t want– they are in control of every decision made along the way.
Occasionally, a Buyer Representation Agreement will call for the client to pay some sort of transaction fee in addition to the standard payment. This is a fee that the agent pays to their brokerage for transaction management, and some agents will attempt to pass this along to their clients. Like everything else in the agreement, it’s negotiable, and not every agent will attempt to tack this fee on.
So how do you find a buyer’s agent that’s a good fit for you? Aside from a lender referral, here are a couple of good ways to go about this:
- Referrals from friends or family are a common way to find an agent. Talk to people in your circle who have bought or sold a house in the last few years, and see what their experience was like.
- Open houses. Here’s the truth about open houses: they’re not just trying to sell that particular house. The agent hosting (who often is not the listing agent for the house) is also trying to find new clients. Go ahead and use open houses as a way to audition potential agents. Ask detailed questions about the house, the location, and the real estate market (both macro and micro). If the agent proves to be knowledgeable and you have a decent rapport, consider following up.
If you have options— and you do; there are plenty of agents wanting to earn your business— interview them one at a time. Take a call or a meeting, or go for coffee. This person is going to be your trusted advisor for some time, and you want to make sure you’re on the same page.
Tip: Your Realtor should be prepared to do a lot of hand-holding, which is expected with first-time buyers. If it takes them explaining the same thing to you seven or eight times for it to sink in, a good one will explain it seven or eight times. With a smile.
You may also be tempted to press the “contact agent” or “schedule a tour” buttons on Zillow or Redfin. On Zillow, this connects you to an independent agent who is paying Zillow for the lead (you), and they’re paying a hefty chunk of their compensation for the privilege. Zillow does little to no vetting of this agent. Redfin operates a little differently in that it has its own agents, and you’ll be connected to an Associate Agent for whom showing houses is essentially gig work. If you have done the work to find your own well-qualified agent, they’ll be doing far more than just opening doors.
Part 3: Shopping
Time to go see some houses!
You’ve been browsing Zillow, Redfin, realtor.com, etc., all of which will show you the same houses, as they are syndicated by your local area’s Multiple Listing Service. Perhaps your Realtor has set you up with a more refined search on a system they like. Whichever site you prefer is fine. You can’t smell a house from an app, though, so it’s time to get on out there and actually open some doors.
There are two main ways to see actively listed homes: open houses, and private showings set up by your Realtor. Let’s talk for a moment about best practices for each.
Open houses are a great way to see a bunch of houses on a Saturday or Sunday afternoon with little planning. As mentioned above, they’re also a good way to audition potential agents, and there’s no need to actually be a realistic buyer for the house. Tire kickers are welcome. However, it’s going to be a cursory look at the home. You may feel pressure from having a host nearby, and potentially from other visitors. It’s not always the most comfortable setting for those reasons. Still, you get to see some of the basics (floor plan, condition, how the neighborhood looks, how steep the driveway is, pet smell or lack thereof) that are tough to gauge from the photos. If you have further interest after this initial look, talk to your Realtor about setting up a second showing.
Once you have a Realtor on your side, they’ll set up private showings of actively listed homes for you. These showings are far more useful than open houses for actually determining if it’s a house you want to make an offer on. At these showings, you can discuss the qualities of the home with your trusted advisor, and you can take an in-depth look at the condition and components. How does the roof look? What’s the age of the HVAC system? Is there water pooling in one spot in the backyard? Is there an oddly placed throw rug that might be hiding a carpet stain? This is the chance to put some critical eyes on the property— yours and your Realtor’s.
Tip: When on someone’s property, assume there are cameras recording (whether disclosed or not). Don’t talk prices or negotiating strategy; wait until you’re away from the home and out of earshot.
Starting with a broad search is fine, but once you’ve been looking for a little bit (online and in real life) you should narrow down your criteria. What do you need and what can you live without? Defining these objectives will make the search more manageable.
The easiest way to begin narrowing things down is by geography. If you’ve decided that being in a certain school district is a deal-breaker, start there. Price is, of course, also a major criteria, but keep in mind that all homes are negotiable and the final price might end up being less than the list price (perhaps significantly). If you have an absolute maximum budget of $700,000, don’t set your search criteria to max out at that number— go a bit higher.
Tip: The schools that are assigned in a listing are often incorrect. Most school districts have an online boundary map, so double-check there.
I’ll backtrack just a bit regarding deal-breakers. The funny thing about them is that they can and possibly will change. You might think at the start of your search that a house MUST have a three-car garage, but when faced with the reality that, say, a third garage bay adds $100K to the price and severely limits the available houses, the priority may change. One deal-breaker can outweigh another, which means your deal-breakers weren’t necessarily deal-breakers in the first place. Also, your spouse has their own set of priorities, and as all married people understand, deal-breakers have a way of being reclassified as compromises.
Tip: If you’re having trouble deciding how important each criteria is, make a list of what you think your “must haves” are in a house. Then find some listings that are strong on some of them but weak on others, so you can see the trade-offs necessary to get the “must haves.” Your brain will start ranking their importance for you.
One last note about seeing houses: it’s important to respect the homeowner who, particularly if they’re still living in the home, has put a lot of work into preparing for your showing. They had to make the home show-ready and vacate the premises, which can be a challenge when there are kids, pets, and busy lives to work around. When asking your Realtor to request a showing of an occupied home (and your Realtor will know when a home is occupied and when it’s vacant), give them as much notice as you can. It doesn’t have to be at least 24 hours, but that’s a good goal. Also, don’t blow off the showing. If things change and you can’t make it, give as much notice as possible. As stressful as shopping for a house can be, it can be more stressful to sell one. Respect that, as you will likely be in their shoes someday.
Part 4: Writing an Offer
You’ve found a house you can see yourself living in, and want to make an offer. An offer is more than just the price you’re willing to pay, though. The contract that Oregon Realtors use to write offers is fifteen pages long, and those fifteen pages will include most details of your offer. Here are the big ones:
Price: By now, you and your Realtor have looked at data, examined the market, and arrived at what you believe to be a good purchase price. You will include that number in your offer (of course), along with how much of a down payment you’re making and how much earnest money you’re including.
Earnest money is a good faith deposit. Usually it’ll be 2%-3% of the offer price, and this money will be due within three days of the seller accepting your offer. It will be held in escrow until closing, at which time the money will be applied toward your down payment. If, however, you terminate the transaction using one of your allowed contingencies, you will get your earnest money back. If you terminate the transaction without using a contingency, the seller will likely be entitled to keep this deposit.
Tip: Don’t just throw a dart when deciding what price to offer. Your Realtor will help you analyze comps (short for “comparables,” or recent sales of similar homes), days on market, seller wants and needs, macro and micro market conditions, and the condition of the property to come up with the right offer price.
Wait, what are contingencies?
Contingencies: The standard contract includes several contingencies— conditions that must be met for you to be satisfied— available to you that will allow you to exit the transaction and get your earnest money back if those conditions aren’t met. Among them:
- Inspection: When writing the offer, you will decide what sort of inspection clause to include. Assuming you elect to do third-party inspections— and the seller agrees— you will have a period of time to have those inspections conducted (at your cost), get quotes from contractors, and negotiate any repairs or credits with the seller. If you can’t come to an agreement with the seller— or there are simply more issues than you want to deal with— you can terminate the transaction using this contingency.
- Seller Property Disclosures: The seller is required by law to fill out a disclosure document, which will outline any known material defects with the house. You will have the ability to review these findings and either approve or disapprove.
- Financing: So what happens if you’re making your way toward closing and your loan falls through? Your earnest money is protected by a financing contingency. This contingency also protects you if the lender’s appraisal (more on that in Part 5) comes in short of the purchase price.
There are a couple of other standard contingencies (such as one to review any HOA documents, if the house you’re purchasing falls in one), and more can be written into the contract. The ones above are the big ones, though, and most transactions that fail will do so over one of those issues.
Personal Property: If you want the seller’s washer and dryer or refrigerator or any other personal property, you’ll need to cite them in the contract. Personal property includes basically anything that is not attached by more than a plug. The general rule is that if it’s built in or requires a screwdriver or shovel to remove (e.g., ovens, light bulbs, curtain rods, fruit trees), it’s a fixture that will stay with the home. Another informal and inexact way of determining fixtures versus personal property is a bit more fun: if you turn the house upside-down and shake it, anything that falls to the ground is personal property.
Tip: To avoid confusion about what is and isn’t personal property, call out any items you want specifically. Also, it’s wise to take pictures of any large appliances when visiting the home so the seller doesn’t switch them out for cheaper models before closing. That would be a contract violation anyway, but evidence is always nice to have.
Closing Date: You will state in the contract when closing will occur. In most cases, this will be around 30 days from offer acceptance, but it can vary. You and your Realtor will determine this date based on how much time the lender needs to process the transaction, along with the needs and/or wants of the seller.
Offer Deadline: Offers in Oregon typically have deadlines on them, which in most cases are 24 to 72 hours from the time the offer is submitted. This will keep you from pulling your hair out waiting for a response (at least for no longer than 24 to 72 hours).
Other Details: The sky is the limit here. Your offer might include seller concessions (i.e., asking the seller to pay for some of your closing costs), post-closing occupancy for the seller, or any number of other conditions. All of those will go into the contract or an addendum that goes with it.
Your offer will be the combination of price and terms that work best for you and will be attractive enough to the seller to choose your offer. There will be negotiating— it’s always wise to expect a counteroffer. Your Realtor will advise you at every step of the process, but ultimately every decision is yours to make.
The writing and waiting are stressful, there’s no doubt about that. You also need to prepare yourself emotionally for what happens if your offer is not accepted. I have no great advice here— everyone reacts to disappointment differently. Just remember that you don’t own the house until you own the house, so do your best to not get too emotionally attached. However, take whatever time you need to process and regroup before plunging back in; it will make you a more seasoned shopper.
Part 5: In Contract
You’ve now written and submitted an offer, and hours or days later the phone rings. It’s your Realtor giving you the good news— your offer has been accepted! Take this moment and enjoy it, as it’s a big step toward owning your home. It’ll also be the last quiet moment for a little while.
Now comes the part where the machine fires up and starts moving. You will start getting requests from a bunch of different people for various things. Here are the next steps in the process, and how you’ll be interacting with them.
Escrow: On the first active day of the transaction, the listing agent will open escrow with a title company. The title company has two intertwining roles in the transaction. They will handle escrow— meaning they’ll oversee all deposits, payments, and settlements as a neutral party— and they will insure title to the home. More on that in a bit.
Earnest Money: Your earnest money deposit will be due within 72 hours. The escrow company will reach out to you to arrange payment. Earnest money can be provided by personal check.
Mortgage Application: This is the point at which you will formally apply for a loan. Reach out to your lender to begin this process. You will also find out at this stage what interest rate you’ll be paying. Have a discussion with your lender about whether to lock the rate now (meaning it can’t be changed later) or allow it to be changeable. Note that with a rate lock, many lenders will still allow a one-time “float down” option, in the event that rates do drop while you’re in contract.
Your lender will send you a Loan Estimate, which is a required-by-law document that details all of the pertinent loan details. This includes your interest rate, payments, and closing costs (loan origination, appraisal, discount points, taxes, etc.) If you have questions about any of them, ask.
Tip: Discount points are a way to prepay interest so that your rate will be lower. One discount point usually costs about 1% of the loan amount and will typically lower your interest rate by 1/8%-1/4%. Run the math: divide the up-front cost of the discount points by the monthly savings and you’ll see how many months it takes for the points to pay for themselves.
Inspection: If you’re doing third-party inspections, your Realtor will discuss arrangements with you and recommend some home inspectors. Depending on the size of the house and the add-on services being offered, this inspection can range from $500 to $1500 and will generally take 3 to 5 hours. You don’t need to be there for the entire inspection, but it’s wise to be there for the last thirty or so minutes to discuss findings directly with the inspector.
Tip: Two add-on inspections are commonly offered: radon testing, and a sewer scope. These are both highly recommended. Radon is a health hazard (which can be relatively easily mitigated when discovered), while sewer lines can have very expensive problems that aren’t apparent to the naked eye.
Preliminary Title Report: Ultimately, the title company is going to issue title insurance (one policy for your lender— which the lender will require and you’ll pay for— and one for you, which in Oregon is customarily paid for by the seller). While most insurance covers events that might happen in the future, title insurance covers events that happened in the past. This insurance kicks in when, after closing, title defects are found. These could be outstanding liens or judgments against the house, conflicting ownership claims, or undisclosed easements, among other things.
The preliminary title report is a record search of all pertinent details about the property and the sellers. Any known title defects will be uncovered, and these will need to be cleared by closing as the seller is required to convey a clear title to you.
Tip: While title claims are rare, the cost of them can be enormous. Think of it as you would any other catastrophic insurance policy, and the good news is you only pay for it once.
Insurance: Welcome to the world of homeowners insurance. It’s recommended to reach out early to insurance companies to get quotes for coverage, as you may encounter some costs you weren’t expecting based on the condition of the house. Also, your lender will require you to have coverage. Start with whoever provides your auto insurance as there will probably be a discount for bundling, but don’t be afraid to go out and get multiple quotes: insurance companies have differing assessments of risk, and therefore different pricing for those risks.
The above items are most of the events you’ll face in the first week. Once the ball gets rolling, things start to get quieter. The reason why it typically takes 4 to 6 weeks to close a transaction is that the lender is in their underwriting process. Let’s take a deeper look at that.
Underwriting: This is the lender’s process for vetting both you and the house, since after all they’re lending you hundreds of thousands of dollars and want to be sure that they’re making a safe bet. Regarding your qualifications, they’ll be taking a deeper dive into your finances, credit, employment, and anything else that they deem necessary to determine if you’re a good risk. They will also look at the house (price and condition) to make sure it’s good collateral, and that they’re not lending too much for it.
Appraisal: About that last part… this is where the appraisal comes in. Your lender will (most of the time) require that the home be appraised by a licensed appraiser. This appraiser, who works independently of the lender, will study comparable sales and visit the home to assign it a value. If this appraised price comes in at or above the price you’re paying, no further action is needed. If it comes in below, you’ve got some decisions to make, as the lender will only lend against the lower of the appraised price OR the purchase price. If you planned to borrow $400K but the appraisal comes in $25K below the price you offered to pay, that $25k needs to be covered either by you or the seller in some way (or somewhere in the middle). The standard purchase agreement does include a finance contingency that protects you here, giving you the right to terminate the transaction if the appraisal falls short.
The appraisal process is slightly different if you’re using FHA, VA, or USDA financing. In those cases, expect more stringent standards when it comes to the condition of the property.
You’re now several weeks into the transaction. At this point you’ve gotten through inspections, the appraisal came in, and the lender has finished underwriting. If everything has gone correctly, you now get to hear three magical words: “clear to close.”
Clear to close means that the lender is all done and you’re approved for the loan. This is the last step before they send your file to the title company for the actual closing. The lender is also going to send you a Closing Disclosure, which is a document that looks similar to the Loan Estimate you received earlier. Check to see if most of the numbers match— they should. By federal law, the Closing Disclosure must be sent to you at least three days before closing, so that you have ample time to review.
Tip: Although rare, there are still ways for the loan to be denied after you’re clear to close. Don’t lose your job, make any large purchases, or put large deposits into your bank account. Lay low until closing.
Once the title company has all of the loan documents, it will schedule a signing appointment for you. Chances are, the sellers have already done their signing (less paperwork for them) so you won’t be seeing them at closing. Prior to closing, it’s always advisable to do a final walk-through of the house to make sure all conditions have been met and the house is clean and empty of personal belongings.
The signing process will be you and whoever else is on the deed signing A LOT of papers with a notary, probably at the title company’s office. You’ll have arranged for the down payment and other closing costs to be paid (typically by wire), and once you’re done with the mountain of paperwork the title company is going to request the lender’s funds. When everything is hunky-dory— within minutes or hours— they will record the deed with the county and BOOM! You’re now a homeowner. Congratulations! You will arrange for delivery of the keys with your Realtor.
Tip: Be extremely careful when wiring funds so that you’re sending them to the title company and not someone pretending to be. Always get wire instructions directly from the title company- on the phone or in person, NEVER by email or text.
Part 6: Moving In!
That moment you first walk into your new empty house is a bit like the moment you bring a new baby home from the hospital. It’s exciting, a little scary, and you recognize that there are infinite possibilities ahead of you. Aside from the fun stuff (like decorating and furnishing), there are a few practical matters to take care of and things to look out for:
- Change the locks. You don’t know who has keys to the house, so take that worry off your plate.
- If you hadn’t arranged earlier to move the utilities over into your name, now’s the time. Same goes for changing your address.
- You’re going to get bombarded with scammy mailings from companies selling mortgage insurance. They’ll disguise their names to look like your actual lender, and rely on scare tactics to sell. Toss these into the circular file.
- Speaking of your lender, there’s a very good chance that they will sell off your loan within months. This is a normal part of their business model. You will likely be told there’s a different faceless entity you’ll be paying each month.
- Go meet your neighbors! They’ve all been wondering for a couple of months who their new neighbors will be. They’ll be happy to get a knock on the door.
That’s it! Well, not really. There’s furniture to buy, a fridge to stock, and a lawn that will need mowing soon. Also, there’s all of the routine home maintenance that you didn’t have to do when you rented (and there are plenty of online guides for those tasks, and to help you decide which you can do and which to hire a pro for). Owning a home is quite an undertaking, but it is a rewarding one. Each month you get to see your mortgage balance drop a bit, and you’ll have the knowledge that you’re the one gaining the equity instead of a landlord.
Plus, you own it! It’s yours to do what you want with! If you want to paint the walls purple, go for it. If you want to tear up the kitchen and put in those quartz countertops you like, that’s your choice. You can go full HGTV on the place (but please, ask an expert before taking a sledgehammer to any walls). Settle in, and sleep well knowing that, due to the wonders of amortization, in twenty years your principal and interest payment will be the same as it is today. Can you say that about rent?
