Part 1: What's with all the research

Some days I wish someone walked us through as to how much it really takes to buy a house. Sure, we've tivo'd episodes of "My First Home" (TLC) and "My First Place" (HGTV) to give us some idea, but it's a whole new ballgame when it's your money and your 'future' home you're trying to bargain down.

So here's to chronicling our journey and documenting lessons learned.

#1 - Realtors make all the difference.
We were recommended a realtor. Luckily, we really like him and he was quite on top of things in helping us find a house considering we didn't have concrete requirements when we first started out. Plus, since we were relocating, and wouldn't have a chance to check out new listings at our convenience, he was able to check homes out for us and give a preliminary 'yay' or 'nay'.

#2 - List wants vs must haves
The first time we looked at homes was exhausting. We must have checked about 20+ homes in a weekend. Why? We didn't really make up our minds as to what features we must have. It took a few homes to realize, if we were really being honest with ourselves, we really couldn't live in a home that was missing a key 'must have'.

(you know what #1 must have was? it's carpeting in the living/family areas :)... must be an Asian upbringing thing hehe).

#3 - Determine maximum monthly mortgage you're willing to part with
This one was tough for us. It's one thing to know what price range you're qualified for, and one thing to know what realistically will work with your budget. It's easy to get caught up in the emotional aspect of homebuying, and add more dollars to your cap... I was guilty of this: "But it's only $20 over a month!" To which, Nick would counterpoint, "I don't care if it's a dollar over; we set a limit and we're sticking to it. Why bother setting one if you're not going to follow it?).

:P.

But he's right. We don't want to fall in that trap.

#4 Shop around for a lender.
Another tough one for us. With the current status of the economy, most lenders shy away from offering loans to new/pending graduates. Most want to see W2s and paystubs, not an offer letter that could disappear any time. In fact the lenders that we found who would even consider just an offer letter had specific requirements as to what the letter should state (position, salary, start date, acknowledgment of offer acceptance). Also, they need proof that the borrower is indeed on track to graduate. I had to email Nick's transcripts today... Our lender joked that grades are an indication of our ability to pay.

#5 Get a Good Faith Estimate
This was the biggest headache for me, especially since each lender has their own way of showing fees and prepaid expenses (which add to closing costs). I ended up creating a spreadsheet and tacked the numbers there so I was able to compare 'apples to apples'.

#6 Ties with #5, not all lenders ask for origination fees
This one confused me at first since I didn't really understand the reason for origination fees. But as the webs pointed out, they're basically lender fees. They shouldn't be confused with discount points (even though the numbers could end up the same since they are a percentage of the loan amount). Discount points lower the interest rate, origination fees do not.