A Personal Look at a Home Loan
A Personal Look at a Home Loan
When we were kids, I used to drive my older sister Wendy crazy by imitating her. If she wore a pink shirt and jeans, I would go change into my own pink shirt and jeans. When she wanted to ride bikes with her friends, I would pull out my tricycle and tag along. As we got older, things didn't change much, only it became less like imitation and more like competition. We found ourselves hanging out with the same group of friends, going after the same guys.
Finally, Wendy went to college and I went to vet school a few towns away. It was a relief to Wendy, I'm sure, to finally feel like I was out of her hair, and it was a relief to me that I felt I was no longer living in my sister's shadow. We had never gotten along so well as when we finally achieved some distance from each other.
As luck would have it, though, we were not done competing. While I met Greg, my husband-to-be, nearly a year before Wendy met Ross, our men proposed to us in the same month and we found ourselves coming to our parents with the good news just days apart. Though it seemed like the fate of our younger days coming back to haunt us, a double wedding just made sense, and it actually turned out to be a beautiful event that everyone was happy with.
My Dad joked that we should all just move in together, but neither Wendy nor I could laugh too much about that idea. Wendy and Ross moved into a cute downtown loft apartment, and Greg and I started scanning the real estate listings for a house. Greg said he wanted to get into a home as soon as possible before prices in our hometown went up again. We ended up finding a very cute house right on the edge of town. Now, Greg and I just needed financing.
Frank was the loan officer we chose to help us purchase our new home. He asked how much we could afford to put down on a home, and we told him how much we had saved up for the down payment and closing costs and how much we wanted to pay each month.
Frank said we had a moderately wide range of options. He told us we could qualify for more if we wanted to use an interest-only loan. The interest-only (IO) loan would let us have a really low payment, since we wouldn't be paying to amortize down any principal. Greg and I had already talked about that, though, and decided it was too risky for us. Besides, we were qualified enough to buy the little home we'd found without going in the interest-only direction.
Next Frank discussed the pros and cons of an adjustable versus a fixed-rate mortgage. Frank wanted to be sure we understood that our payments might go up if we decided on an adjustable rate, but it could get us a lower rate by about 1.5%. We told him that we preferred the security of a fixed rate, since we are planning to live in our dream home for at least 10 years, and maybe forever. Frank agreed it was the best choice for us. Frank gave us the
necessary "rate lock," guaranteeing our agreed upon rate for the next 45 days, until our home purchase closed. It was a payment we could afford, and helped us win the bid for the house.
We closed on the loan, and the home, a little more than a month later and everyone in the family pitched in to help us move. Wendy admired our new home, and remarked that finally I had really done something all on my own without her influence.
That night we had a big family dinner in the new house. Actually, we were all worn out, so we ordered pizza and sat in mismatched chairs around the kitchen table. It felt good to be the hostess. It felt great to be in a home that I owned, and it felt fantastic to overhear Wendy whispering to Ross, "Maybe we should start looking to buy a house. " I couldn't help but giggle just a little. For that one second, and for the first time in my life, I felt like the big sister.