Saturday, January 18, 2014

The first-time home buyer - a word to the wise

My biggest tip for first-time home buying: just because you went with one bank does NOT mean you have to stick with them when you actually get your loan. 

We had dealt with a wonderful woman from one bank for our pre-approval process (when they determine how much money you can be loaned and around what rate). She bent over backwards to get us numbers we could understand, explained all of our questions, and was very responsive.Unfortunately, when we found our house and went back to get our loan from them, they said their rates had increased. 

Uh, say what? 

Yes, it had been 4 months, but I did not want to pay more than I had to. I asked my Realtor (who honestly, I wasn't a fan of) and he said that it's common for rates to fluctuate, but that all banks will approve at the same rate. I then called my dad, who believes wholeheartedly that everything is negotiable. Buying a tool at home depot? Barter with the manager. Buying a new flat screen TV? See what they can do with the price. So, naturally, he told me to go look at other banks. And since I myself like a good deal (definitely my father's daughter), I did. 

I called up another bank, and within two days I had an interest rate 0.50% lower than what the first bank quoted me. A day after that, the first bank told me they could match the second banks rate. Hmm, funny how the first time around they told me that was the "best rate" they could do.

In the end we still went with the second bank since we had "locked" in the loan and interest rate before the first bank called back. Did I feel bad the first woman didn't get our business? A little, but it's our home we're talking about here. This is not the time to make friends. Our measly 0.50% lower percentage point we got may not sound like a lot, but it was about $45 less per month than the other bank. That's like a date night a month! Spread it out over 30 years that's also $16,200. That's a car, people. A nice, used car. 

What was your biggest tip or take away from buying your first home?


  1. My husband and I are under contract for a townhouse and having the same problems with interest rates fluctuating and not wanting to hurt people's feelings! We know we have to just do what's best for us. Your posts about the home buying process have made me laugh and feel better about going through everything...It's hard work!

    1. First off, congratulations! I know when we bought our home it was so nerve wracking, but totally worth it. And glad to hear I'm not the only one that had issues with rates :). Have fun decorating your new place after you close!