Buying A Home
nursecramer
member
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
If you bought a home in a new city, with new jobs, new bank accounts, etc...
H and I will be moving this spring to one of three potential new cities in a different state. Both of us will be starting new jobs when we move. We will also be opening a new bank account because our current accounts are all with a local bank that does not have branches in any of our potential cities.
When and where do we start talking with banks about mortgages? Would it be advantageous to find a mortgage before we quit our jobs here, or after we start working there? This is a first home for both of us, so I'm not sure what the typical order of operations is.
Re: If you bought a home in a new city, with new jobs, new bank accounts, etc...
This. I've moved to new cities a few times now and I'll always rent first, even for just a few months. You never know how things like traffic patterns, weird areas, etc are going to impact you until you live there IMO.
You'll need a stable job history before you have a mortgage in most cases, if you get a mortgage and then quit your job you'll likely have to get pre-approved, so I'd wait until you are there.
I'd move, find a shorter term rental or negotiate a lease that has an 'out' clause that is light, and then look for a home once you have settled in for 3-6 months.
Totally agree with this.
What is your work history like? You most likely will need a steady employment history prior to your new jobs to secure financing.
Do you have a down payment and and e-fund? 20% down plus 6 months of expenses is a good rule of thumb.
What is your credit like? The better your score, debt-to-income ratio, the better your position to buy and get a great rate.
All of those things will need your attention prior to buying a home.
I agree with the PPs who say rent first. There is no rush. Explore the area, get a realtor, ask about community features that are important to you. Think about the commute. There is a lot to consider when buying. Don't rush it and be sorry later.
This.
And unless you're transferring within the same company, you don't even know that you'll like the job. We moved to a new city for me to take a new job that sounded fantastic on paper. We bought a house, and I knew within 6 weeks of starting my job that it wasn't going to work out, but I couldn't quit bc of a contract clause. I can honestly say that year I worked for that company was the darkest time in my life. And now we're stuck with the house worth $50k less than we paid for it to remind us of how foolish it is to buy before you're settled in. We rent it out at a loss.
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Thanks everyone for your advice, I hadn't even considered renting, because I HATE moving, but we will definitely start looking there first.
Pombride, thank you for the additional comments. Our work histories should be ok-- both employed for the past 10 years. We will have a 50-80% down payment, depending which market we're buying in. We both have good credit scores, no current debt except for H's student loans, which are in deferment as long as he's still at school and will be paid off in full when he graduates.
We just moved this summer for DH's new job. We were able to get pre-approval from a mortgage lender based on DH's offer letter but we couldn't get an actual mortgage until he could provide 30 days worth of paystubs to verify income. If you don't have jobs lined up, it probably won't do you much good to talk to a lender. You will also need to be prepared to not be able to close until you have started your jobs, so renting may be your only option at first.
We ended up finding a house with sellers who were willing to work with us. They accepted our offer with a late closing date and allowed us to rent from them until we could close. People have already given you a lot of good reasons to consider renting, but I have absolutely no regrets about about just buying. For us, there were plenty of reasons in favor of buying--moving with young children, definitely staying at the job for 5-6 years, moving to a relatively rural area which made it easier to identify a place we wanted to live, sellers who were willing to work with us.
If you hate moving (and who doesn't, right) why don't you find a furnished short term rental and keep your things in storage? You can check out parts of town while not being tied down.
I agree with the rest of the gals. The worst thing ever is to buy something and then figure out you don't really like your area or you could've found something better.
Most of my clients are relocations and this is what some of them do.
Also, here in Austin, you have to have 3 paychecks, good debt to income ratio and credit, of course. I think you should wait until you get there to start talking mortgages. I would find a realtor first and start getting to know the neighborhoods instead.
And if you happen to be moving to Austin, call me
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Angele
You will want (might need) to rent first . Get acquainted with your new area etc. know what area you want to live in. Some lenders require you to be at your new job for a specific period of time prior to getting a loan.
Thanks for offering a contrasting view. Your first three reasons in favor for buying are all true for us, too. And H has an offer (pending acceptance) and they've included relocation benefits. Hopefully, they will also be able to counsel us on the options.