First-Time Buying

To start out with, I thought I’d share my recent experience with being a first-time home buyer. I work at a law firm that does a high volume of real estate deals, and I was talking to a lot of people my age or younger who were buying houses, or who were already purchasing their second home. I was paying rent, and had a decent amount of money saved up, so I talked with my husband and we decided that we would start looking for a house.

The first thing we did was go to the bank so that we’d know what price range we could realistically afford, based on the mortgage amount we were approved for, and our projected down payment amount. We were able to find out the range we would be approved for, but more importantly, what the approximate monthly payments would be on those amounts. Based on those numbers I prepared a budget based on what I was spending at the time, and projecting the extra costs that come with ownership-property taxes, property insurance, utilities, and the mortgage payments. I was as detailed as I could be with the budget, down to the $4.00 I put into the office lottery pool each week. It’s human nature that we’re never going to be able to save as much in real life as we should on paper, so I added in another $200.00 a month for miscellaneous items. Preparing that budget helped me realize that the bank is willing to approve me for a mortgage that my salary will cover, but that doesn’t leave me any leftover money for things like food and gas, among other things.

Armed with that information, we knew our general price range. We looked at a few places, fell in love with one, and were lucky enough to have our offer accepted. We went back to the bank and the mortgage was approved after the appraisal came back positive.


So, some tips:
1. Make sure that you know what you can get approved for, and what you can afford, before you start looking at houses. It’ll save you a lot of time, and you can avoid putting in offers on homes that you won’t get approved for.
2. Remember that a pre-approval from a lender doesn’t mean that you can borrow that amount on any home-you still need to obtain an approval for that specific property. In other words, if the bank pre-approved you for a mortgage of 300K, and you put in an offer on 10 Main Street, but the bank only appraises that property at 250K, they aren’t going to give you the money.

That was a quick overview of my experience, in future posts I’ll have some information based on common questions clients have for us, and anything new that we come across. Feel free to email with any questions or topics that you’d like addressed.