I’ve compiled a list of things you need to know before you buy a home. These are things I wish I had known. My husband and I recently bought our first home and there were so many unknowns. Neither of us work in real estate or any other profession that would have prepared us for the whirlwind that is buying a home.

We were so unprepared. My goal with this list is to help you be more prepared. Some of these things have been mentioned in a previous posts but I think they’re worth repeating. I’m sure I can come up with another list in the future but for now these are things you definitely need to know before you buy a home.
If you are married, only the lower of the 2 credit scores will be used
This shocked my husband and I. We had no idea that they only use the lowest of the 2 credit scores on the loan application. I’ve given this example before but I’ll give it again just in case you didn’t the last post. For example, Mr. Smith has a credit score of 680 and Mrs. Smith has a credit score of 775. For the loan application 680 will be used because it is the lower of the 2 scores. This was not something my husband and I knew going into this process. This is something that can dramatically alter the home buying process if you are unaware.

The inspection
Before you buy a home you will need to get an inspection. You don’t have to be there when your home is inspected but I HIGHLY recommend that you are. After our inspection the inspector walked us around the entire property. He pointed out everything that he was going to put on his report and why. He also gave us tips for how to properly maintain the property. Because he took the time to explain everything we were not confused when we received the inspection report. If we had not been at the inspection there is a good chance that we would not have understood most of the inspection report.
Another thing to know is that the inspector may not find every single problem. Hopefully they will find most of the issues, especially the major ones. But there could be underlying issues that are not found. I recommend keeping money in your savings account just in case there is an issue that the inspector did not catch.
You can’t use credit while in escrow
Technically you can use credit while in escrow but you shouldn’t! One of the requirements is that your debt-to-income ratio (DTIR) stay under a certain amount. I believe it’s under 40% but I don’t remember the exact percentage. When you are in escrow the lender will review your DTIR throughout the escrow process. If you are using credit and your DTIR rises your loan can be denied. Don’t go out and buy appliances, furniture or any big ticket items on credit until you’ve closed and you have the house keys in your hand. I will link a DTIR calculator here for you to use as a resource.
There are a lot of people involved
You will have calls, emails & texts from your realtor, realtor’s assistant, your mortgage broker, etc. There are so many people you will need to contact and communicate with. Just make sure that you are answering emails and calls promptly so you don’t delay the process.
You need to be available
You may get calls, emails & texts throughout the day and into the night. There are certain time-sensitive parts of the escrow process that will need to be handled immediately. In order to keep things running smoothly I recommend making yourself available as much as possible while in escrow.
Other things you need to know if you before you buy a home…
You need money readily available
When your offer is accepted you will be asked to put down earnest money. Earnest money lets the seller know that you are serious and you intend to go through with the sale. Earnest money, in our case, had to be deposited within 48 hours. We had to wire money from our checking account to the escrow account in order for it to be received in time. If you intend to use your 401k for a down payment you may not have access to that money quickly enough to use it for earnest money.

If you are using your 401k for a down payment I suggest that you also have at least $10,000 in a bank account that is easily accessible. When you borrow from your 401k it takes time to process the request and you may not have access to those funds for 3-5 days. So, 401k may not be an option for earnest money.
Be sure to read your 401k’s rules
Speaking of 401k’s, these are a great way to help you make a down payment if you need it. Some retirement accounts will allow you to pull money out for a down payment but make sure you read the fine print. Some plans will charge you a flat fee and others will require you to pay back the money within a specific time. Each plan will have specific requirements so just be sure to read the requirements for your plan.
Read every single form
Mistakes happen. I found several mistakes on different forms throughout our escrow process. Some were minor mistakes like spelling or a wrong phone number. Other mistakes were huge like a misplaced decimal point or forms stating that we got an FHA loan when we actually got a conventional loan. I highly advise you to read every single form. I know it’s time consuming. Some forms are 20 pages long but it’s important to read every page. I caught at least 5 mistakes on our forms. Luckily I caught these errors before I signed but I wasn’t joking about the decimal error or the loan type error. I found both of those errors and a few others which is why I recommend reading everything before you sign.
Your actual mortgage amount
You will not find out your actual mortgage amount until right before you close. This was a shock to us. We found out our exact mortgage amount 2 days before we closed. Throughout the process we were given estimates but you have to wait until you sign the final paperwork to know the exact amount.
You might get a refund
A couple weeks after closing you might get a refund from escrow. After you close escrow and all the calculations are done you may have overpaid and escrow will send you a refund check. There is no way to know if you’re getting a refund or how much you will be getting until after you close. If you do get a refund it is fun surprise. We were able to make some major improvements to our house with our refund and increase the value of our home.

I hope this list of things you need to know before you buy a home was helpful.
I may make another list like this in the future because there were so many things that my husband and I did not know. Please feel free to reach out with any questions or comments. If you like this post or found it helpful please share it on Facebook or Pinterest!