I am certain this will be an ongoing theme – but I thought I should go ahead and share some of the items no one told me about.
First of all, have a lot of cash. I was awareI would have to pay for closing costs, but no one told me that comes out to a minimum of 10 percent of the total purchase price of the house. Ouch. On the plus side, you can ask the seller to take on some of the closing costs, but only about 1/4 to 1/3 so don’t get your hopes up it will save you a lot. You will have to pay an escrow company “earnest money” to prove you are serious about the purchase. My mortgage company also wanted me to make an up front payment, although I was assured both will count toward my closing.
Second problem is scheduling. The realtors and mortgage officers work really strange hours, so you may get updates on information well outside of normal business hours. Most of our news came at 9:30 pm our time. Note to others: turn off your notifications if you want to sleep.
Check on the home owners insurance in your state. I was unaware that Oklahoma is 66% higher than the national average and this not only freaked out my mortgage officer it caused me a ton of heartburn as I looked for a reasonable way out of the problem. A second mortgage officer was much easier to deal with.
Speaking of insurance, you will have to google that shit yourself. My insurance agent told me repeatedly that if I got flood insurance I would need to carry it forever on this property- but never explained to me what an AE flood zone was (means 1% chance of flooding every year), or why the replacement value on my house is 4 times its purchase price (that one I still don’t understand).
Back to the point about have lots of cash on hand: you will have to pay home owners and flood (if applicable) insurance for one year up front. That added 2k to my closing costs – which must be paid by cashier’s check – and I believe they want it to be your own money, not a gift. That last was implied by questions I was asked before they gave me the loan.
If you go through FHA, be prepared for delayed closings and lost of inspections. I paid for my own inspection, and there was nothing that inspector considered to be problematic, just some recommendations. The Appraiser for the mortgage company, however, wanted items repainted, wood replaced, the roof and foundation inspected and repaired before signing off we could have the loan. Thankfully the seller agreed to most of the repairs – and my realtor helped out with painting some of the stuff the appraiser brought up after the contractor had left.
Which brings me to the next point – get a good realtor. There are things about the process – like the need for earnest money – that just don’t show up in most articles about buying a house.
Finally, despite all your best efforts, you may find the title is not clear. That’s one thing we are still working on. Cross your finfgers for me and we will hope to close on august 24. (Edited 6 hours later : we have been pushed back to 8/27)
Stay tuned, I am sure I will think of other things to mention as the stress of the experience fades.
Till next time