Tale of a First-Time Homebuyer: Money Matters

Last week I told you the beginning of my Tale of a First-Time Home-buyer. Below, my story continues...

Money Matters

So, we want to buy a house. That much is determined. How are we going to do that, you ask? That’s a great question. When you find out, please let me know.

“My friend Kelly is a Realtor,” my wife says. “She can answer some questions for us.” Sure, it sounds like a good idea. I could ask my Dad, but he would just tell me not to spend too much, that I don’t want to be house poor, that I should think this through a little more... typical Dad stuff. I decided I would gather a little information before I hit him with news. I’m not ready for someone who knows us to see us squirm as he or she realizes that we know nothing. I would rather talk to someone we don’t know, so I can ask all the dumb questions dancing through my mind.

So after talking to a few people, a friend gives me the number of his friend who is a loan originator and a Realtor. He has lived in South Riding, the area where we would like to begin our search, his entire life. I called him and we arranged a meeting.

I have preconceived notions about everything, and I have come to realize that I am usually wrong (thank goodness). I was afraid that our Realtor would want to rush us into a house, whether we liked it or not, complete the job and move on to the next client. Not surprisingly, I was very wrong.

Our Realtor, Gene, was very patient and nice. He was knowledgeable and he didn’t seem to mind as I asked dumb question after dumb question. He had a mortgage calculator on his computer where he could input all of the variables such as the cost of the house, the down payment, the interest rate, and other important information and out pops an estimated monthly payment.

Geez those numbers were big. Some of the decisions that were made at this first meeting included that we were going to use an FHA loan, which only requires 3.5% down, and that we were looking to spend between $275,000 and $340,000. In my mind, the $340,000 was a stretch beyond all imagination and I would not even consider spending more than $315,000 or $320,000. (Spoiler alert… wrong again!)

Gene and I planned to meet the following weekend in South Riding and he would take us around and show us the types of houses in our price range.

I have to say that I was pleasantly surprised. I didn’t know we only had to put $3.5% down, which would only be $10,500 on a $300,000 house. We have been saving for a while and that would not be a problem. I also didn’t know that we could really, truly afford to buy a $300,000 house. And that $8,000 tax credit for first time home buyers was looking pretty sweet.

I drove home to report to the wife. Is this really happening? I think so.