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Kat, Jake, and their cat, Tali

Homebuying journey: Kat and Jake's story

By Laura Kapp

September 2016

Homebuying journey under their belts, Kat and Jake saw a successful end to a jam-packed year for the two of them. And even with new jobs and a wedding to plan, the time was right to purchase a house.

“I wanted our own home because the rent was going up and stuff was falling apart in the apartment. I thought since we were spending this much money, we could tie it to a mortgage,” Jacob explained. He is an engineer with Rockwell Automation in Mequon, Wisconsin.

Katherine said that buying a home really wasn’t on her radar. “Owning a home seemed so complicated, with mortgage payments and property taxes. I was much slower to get on board with the idea of buying a home. It seemed like such a grown-up decision,” she said. Katherine is a graphic designer for a local university in Milwaukee.

But once the process was underway, they moved forward together. They were happy to share what they learned on their first homebuying journey.

Begin your home-buying journey with a lot of online research.

“There are so many tools and resources you can use on your homebuying journey. We found calculators that showed us how much we could afford, and where we could find the best interest rate,” Jacob said.

Online resources

 

Find a bank that fits your personal style.

Jacob and Katherine asked for references from family and friends. But they found that what worked for a friend did not really work for them.

“We went with a bigger bank, but we probably should have gone with a smaller bank that had a more personal approach,” Jacob said.

They needed someone to help walk them through the mortgage process on their homebuying journey. Some homebuyers may prefer a more hands-off approach, but Jacob and Katherine felt that they got lost in the shuffle of the bigger bank and were neglected by their busy loan officer during their home-buying journey.

“The process wasn’t easy. It took longer than we thought to get our closing cost amount, and I spent a whole day running around, getting that together,” Katherine said. She said it would have helped to understand what to expect in advance.

Trust your real estate agent.

“Our real estate agent spent a lot of time with us. He got straight to the point and was very honest. He figured out what we wanted, where we wanted to live and what we could afford,” Jacob said.

Look in the basement first.

“Our real estate agent said we should look at the guts of the house first. Don’t be distracted by things like granite counter tops and stainless steel appliances,” Katherine said.

Jacob agreed, “You can get too caught up in the aesthetics of the house and it has been staged that way on purpose. It could be a beautiful home, but not if the basement is caving in. We looked in the basement first, at the foundation and to see if anything was damp.”

If you don’t have a 20% down payment, consider mortgage insurance.

Katherine and Jacob saved up for a down payment, but it wasn’t enough for the 20% down typically required for a mortgage. Instead, they had enough for a 10% down payment, and mortgage insurance helped them qualify.

“We wouldn’t have been able to buy our house with only 10% down without mortgage insurance,” Jacob said. And he noted that with enough equity, mortgage insurance could potentially be cancelled.

Down payment funds can come from relatives or friends.

Although they were good savers, Katherine explained that most of the funds they used for their 10% down payment came from their parents.

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Laura

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Laura Kapp is the former creative director of the writing and design team at MGIC. Now she works from her 1958-ranch-style home, accompanied by dust bunnies. Her messy home office proves the saying, “Creative minds are rarely tidy.”
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