3 Things No One Tells You About Buying a House

This past November, my boyfriend and I were lucky enough to buy our first home — even with student loans and an ongoing pandemic

Not even COVID-19 could dull the thrill of buying a home, though it did make it an incredibly sterile process (pun intended). Even though I write about mortgages and buying a home for a living, the process still came with many learnings. Now, this might seem obvious for seasoned home buyers, but for my first-time home buyers, this one’s for you. 

1. Be prepared to feel financial anxiety

Millennials grow up thinking that they’ll never be able to afford anything — or at least I did. Because of that, I thought my days of buying a house were years away. But after a frank conversation about just how much we were paying in rent, we realized that buying a house was a much better investment of our money.

[ Read: How Do You Know You’re Ready to Buy Your First Home? ]

That said, your mortgage isn’t the only number that you need to think about when you’re deciding to buy. Don’t forget about things like closing costs or your down payment.

So, when the full-blown “no way I can afford this” panic set in, we sat down and evaluated our finances — and not just how much money we each had in the bank. We took into account our bills, student loan payments and potential monthly mortgage payments in a simple excel spreadsheet. Seeing it all laid out in front of us made things doable. 

It’s important to compare your financial obligations to how much you make and consider how much you could afford if you lost your job. 

2. With purchasing power, comes great responsibility

I chose where I went to college and what I do for a living, but I’ve never felt more in control of things in my life. Which admittedly was pretty terrifying because I had no idea what I was doing.

Our realtor was helpful, but when it came down to it, he could only suggest things. Ultimately every decision landed on us. Not all choices were complicated  — deciding on which house to pick was easy enough. After we shopped around for rates and compared who was going to give us the best terms, we chose our lender. But everything after putting an offer in was where things got tricky. 

[ Read: Best Mortgage Rates for February 2021 ]

From what inspections you want to which lawyer you want to use, you have to decide, even when you have no idea if you made the right choice. 

You also have to decide how much house you should buy, not just how much you can “afford.” I can’t explain the flurry of utter shock when we were pre-approved for a $600,000 mortgage. There was no chance we could actually afford that price. Even if a pre-approval doesn’t guarantee a mortgage, don’t let a high number like that lead you to take on more than your finances truly allow. 

3. The lessons will never end

There is no such thing as perfection when it comes to purchasing a home. There will be repairs to be made, and budgets to reevaluate. But with an open mindset, the inconveniences can become learnings. Here are my top three.

Everyone may know the word appraisal, but not what it really means

I happened to be buying a home at the same time as a friend, and it was interesting to see the noticeable differences between our journeys. They ran into trouble with their appraisal, which at the time I thought was a very obvious process. However, their experience makes me realize that knowing something topically doesn’t mean you understand the implications. 

A home appraisal is required and will be coordinated by your lender. But if the offer accepted by the seller was for $300,000 and the appraisal values the home at only $290,000, your lender is only going to give you what the home is worth.

If you don’t have an extra $10,000 lying around to cover that gap, you’ll have to check if the seller will come down. Thankfully it all worked out for my friend, however, had it not, they would have lost money when they would have been forced to walk. 

In this article

    Really think about what to spend money on

    Given that the coronavirus is still very much around, we thought it best to forgo movers or painters to keep our bubble as small as possible. Not to mention the added benefit of saving a significant amount of money. 

    [ Read: 7 Crucial Steps to Buying a Home in 2021 ]

    If I could go back, I would pay for one, if not both. It was a ton of added stress and time that could’ve been saved. That said, the money saved cannot be ignored. The thing about buying a house is that you need a million things right from the start, especially if you’re moving out from an apartment, as I did. 

    Most people likely cannot afford to pay painters, movers and all the things you need right from the start at the same time. Think about what your priorities are. For me, it was painting. If you’re fine with the walls’ colors, save that expense for later and focus on movers or the work your house needs. 

    COVID-19 made for a memorable experience

    In response to the pandemic, lenders have added extra employment verification steps to the process. If you lose your job, you may have to stop the process and reapply later. Yet, the pandemic’s reach went beyond just the underwriting process. 

    If I saw my realtor on the street post-pandemic, I would not recognize him. We wore masks for the entire process, and even the official closing was done outside in the cold, with two pairs of sterile gloves and masks. It was not an exciting event like many people describe. The most exciting part of closing was getting to keep the pen at the end. 

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    Image credit: Bibadash / Shutterstock

    Taylor Leamey

    Personal Finance Reporter

    Taylor Leamey is a personal finance reporter at The Simple Dollar who specializes in personal loans, student loans, mortgages, renters, and financial policy. Her reporting has also been featured at CreditCards.com, Interest.com, Reviews.com, MyMove.com, and elsewhere.