Here at NerdWallet, we may be personal finance experts — but that doesn’t mean we always knew the answers when it came to our own finances. In honor of Financial Literacy Month, some of our Nerds are sharing money mistakes they made and lessons they learned along the way.
The last three weeks featured employee stories about overcoming debt, saving for retirement and building credit. This week, we’re focusing on lessons we learned about buying a house.
Be sure to follow us on Twitter and Facebook for more great tips during Financial Literacy Month.
Samantha Allen, content pro at NerdWallet
What was the biggest or most unexpected lesson you learned when buying a house?
“From hiring an attorney to understanding all of the various closing costs, I had no idea how many fees and costs are involved with buying a home. I was hyper-focused on the down payment amount we had saved up and didn’t realize how many other fees would be involved in buying a home. Note to self: You actually need to save more than your down payment amount.”
What do you wish you’d done differently?
“Organize! One of the most stressful parts of buying a house was getting our financial documents and accounts in order to apply for a loan. Only when we started the preapproval process did my husband and I realize how many different accounts we had spread out all over the place. Knowing where all of our accounts are and how to access them (I’m terrible with passwords!) sounds simple, but it turned out to be something I wish I’d done better.”
What would you tell your younger self when it comes to buying a house?
“Save, save, save — and don’t rush into it. Buying a home is exciting and something I really wanted to do, but it also comes with a whole new set of responsibilities. Wait to dive into homeownership until you are confident you can handle the new expenses (besides your mortgage payment) that may come up each month.”
What was the most challenging thing you faced?
“It was actually pretty scary to part with such a big chunk of change. We had worked hard to build up our savings and I was really excited to buy a house, but wiring our down payment to close the deal was unexpectedly nerve-wracking.”
Rick Johanson, recruiting pro at NerdWallet
What was the biggest or most unexpected lesson you learned when buying a house?
“The time investment. I didn’t realize how much time and energy are required for finding the right home. Knowing what you want in a first home can really help alleviate this, though, as well as having your finances organized so you can move quickly if needed.”
What do you wish you’d done differently?
“I wish I would have listened to my gut and bought in 2010.”
What would you tell your younger self when it comes to buying a house?
“Determine what is really important in your first home. The must-haves. Consider homes with ‘good bones,’ and don’t overlook areas that you haven’t spent much time in.”
What was the most challenging thing you faced?
“The competitiveness of the market. It’s hard not to become discouraged when homes have nearly dozens of offers. There is a lot of pressure throughout the process, but the trick is to remain patient and have a good Realtor who is empathetic. It will work out when the time is right.”
Deborah Kearns, content pro at NerdWallet
What was the biggest or most unexpected lesson you learned when buying a house?
“It’s an intensely emotional process. This is likely the largest financial transaction of your life, and it’s also intimidating and overwhelming because you’re making a long-term commitment.
“What probably surprised me most was how difficult it was to narrow down the search. We probably looked at 40 houses when we bought our first home in 2008, and we put offers in on just two. We didn’t have a developed sense of what we wanted besides a price range. For our second home purchase in 2013, though, we put an offer in on the fifth house we saw and it was accepted that day. We knew exactly what we wanted and were more aggressive with our offer to ensure we got that house.”
What do you wish you’d done differently?
“I wish I would’ve rate-shopped a little more and explored the different mortgage products out there. The mortgage process can be complex, but there are some calculated risks worth taking that can save you money.”
What would you tell your younger self when it comes to buying a house?
“Be patient and don’t get discouraged! Our first go-round took a few bids (and losses) to find the right house, and it was stressful. It’s so easy to get frustrated when you’re outbid several times, or the sellers won’t work with you because they have the upper hand. Don’t give up because your first, second or even third offer doesn’t make the cut. And definitely don’t settle on location; you can always fix up a house but you can’t change where it’s located.”
What was the most challenging thing you faced?
“It’s a long process. Searching for a home is like having a full-time job. You’re searching online, taking time on the weekends to go on showings, spending time gathering paperwork and answering emails. All of the steps can feel overwhelming. When you finally get your keys and you get to make a house your home, though, it’s the most gratifying feeling of accomplishment there is.”
Arielle O’Shea, content pro at NerdWallet
What was the biggest or most unexpected lesson you learned when buying a house?
“I learned how important it is to not sink all your liquid cash into a home down payment — in other words, wait until you have enough savings to make the down payment and maintain an emergency fund.
“I was really glad my husband and I did. We walked into the home after closing only to realize the central air had been on all day, but it was 103 degrees upstairs. We had to put a new unit in the week after we moved in.”
What do you wish you’d done differently?
“I would’ve bought a house with a functioning A/C. Just kidding. I would’ve gotten personal recommendations for an inspector, rather than blindly going with the one my agent recommended and not asking any questions. He failed to notice the broken unit, which ended up costing us a lot of money.”
What would you tell your younger self when it comes to buying a house?
“Save early, and don’t feel pressure to buy if you aren’t financially ready.”
What was the most challenging thing you faced?
“All of the unexpected expenses. To be fair, old homes are common in my small city and I bought one that was built in 1910, so I knew things would pop up here and there. But when you own a home, unexpected expenses happen much more frequently than you can ever anticipate. (We are getting a new roof as I type.) Having an emergency fund makes them much less stressful.”
Stacy Stuart, executive assistant at NerdWallet
What was the biggest or most unexpected lesson you learned when buying a house?
“A great mortgage broker and Realtor who have worked together in the past definitely make for a more pleasant experience. Because ours had worked together in the past, they were super-fast and efficient.
“[My fiance and I] did so much research about the homebuying process beforehand and it was great to have a basic understanding of what it means to buy a home, so we knew what we were getting ourselves into.
“We learned that going with our gut and knowing what’s right for you is a big part of the homebuying process. We probably saw about 50 homes over the course of two months and spent most of our weekends going to open houses. We came close to putting an offer on a beautiful, completely renovated house, but it was in an unsafe neighborhood. When we were looking over the property disclosures the night before we were going to put in the offer, we were going through a mini panic attack and felt in over our heads. In the end, we decided on going for something that was better-suited for a first-time homebuyer.”
What do you wish you’d done differently?
“I wish we would have saved up for a bigger down payment instead of just putting just 5% down.
“We were so eager to get our own place because home prices in the Bay Area kept on going up, and our living situation wasn’t sustainable.”
What would you tell your younger self when it comes to buying a house?
“I wish that I would have avoided credit cards and going into debt when I was younger, because that really derailed my progress in saving up for a home. I should have made sacrifices much earlier on so I could’ve built up a bigger nest egg.”
What was the most challenging thing you faced?
“The most challenging thing my fiance and I faced is actually when we were saving up for the down payment the year prior. We made some major sacrifices! My fiance’s parents were super-generous and let us live in their in-law unit for cheap rent so we could save money. It was really tiny, about 400 square feet, and we didn’t have much privacy. Our kitchen consisted of a mini fridge and microwave. We also donated his car and shared my Honda Civic, so we could save on insurance and gas, and we had to work out a convenient schedule on who gets the car and when.
“We were really lucky to have a ton of support and encouragement from our friends and family during this time so even though it was tough, we felt like the sacrifice would pay off — and it did, big time!”
No comments:
Post a Comment