Home Buying with Sam(PART 2 – CLOSING)

New home buyers need a budgeting coach

A couple of months ago (wait… really? Two whole months?) I shared my experience at the beginning of the home buying process and the ups and downs of online mortgage tools. Now that I’m past the buying process and into the owning process–which is both way better and way scarier, by the way– I can take a minute to reflect.

The folks at my credit union were great. We had a few hiccups, but we worked together and got through closing pretty smoothly. In other words I’m not here to complain, because they were very good at their jobs.

I think the thing that gave me the most anxiety throughout the process was budgeting. Chances are that a lot of prospective homeowners at your credit union feel the same way.

New home buyers could really use someone to be their budgeting coach, to help them through each step of the process.

Budgeting at the beginning

As I mentioned previously, filling out an application to get pre-approved for a mortgage loan feels like serious business. When you work at a credit union and/or deal with these loans frequently, it might be easy to forget how nerve-wracking it is for the rest of us.

At the beginning of the process I was just trying to figure out if I really could afford to buy a house. I wanted someone to tell me what I could afford, but I didn’t want to commit. I didn’t want to sign on with one specific financial institution and that is, of course, exactly what every financial institution wanted me to do.

I really would have felt more comfortable if someone had sat down with me and run the numbers, without making me feel like I was already locked-in. I wasn’t aware if that sort of thing was available to me at the time, so I think it’s fair to assume other people are equally unaware.

Budgeting in the middle

Like I said, budgeting for buying a house is complicated. There’s the down payment, earnest money, closing costs, property taxes… And if you’re like me, you had only vaguely heard of some of them ahead of time. I quickly found out I didn’t just have to save up one big chunk of cash, there were several chunks I had to account for. My attention was being pulled in a bunch of different directions, and it seemed really easy to forget exactly where each cash-chunk was going.

Another area no one really talked to me about was budgeting between pre-approval and closing. There I was, with more money in my savings account than I’d ever had in my life, and I felt like I was living paycheck-to-paycheck again. I was terrified that I would screw something up, that some big bill would come due and I’d have to break into my savings. In fact, I overdrew my checking account for the first time in at least 10 years because I forgot I’d transferred all my cushion to the other account… You can see why I felt like I was one bad move away from ruining everything.

I would have loved to have someone in my corner to make sure I was on track.

Budgeting for the end

Finally, it’s time to close, and I was gearing up to see my savings account decimated… but wait! How much money was going to be left over? Could I afford to make my first mortgage payment? To buy a new mattress or new couch? Suddenly I’m rebuilding my budget for the hundredth time, to make sure I hadn’t overlooked some element of the closing costs, or underestimated my monthly utility bills, or who knows what else. Once again, I wished I had a someone around who knew what to expect.

I know everyone could benefit from a good budget, and this isn’t unique to first-time home-buyers. I mean the common phrases is “house rich, cash poor” after buying a house, so it’s totally normal, right?

Well I remember that it didn’t feel normal. My day-to-day, year-to-year life is (thankfully) not full of this kind of financial turmoil. I acknowledge that I’m very lucky that way. But if anything, that makes the public’s need for a budgeting coach even stronger, because many people aren’t so fortunate that everything works out semi-comfortably.

Credit unions can help

Helping your members manage their budget throughout the home-buying process is just another way credit unions could be showing off their strengths. While there’s no way you can assign a budget coach to every member, a few short check-ins could make a huge difference for your new homeowner members.

I’m sure a lot of people run into financial difficulty shortly after making this sort of huge financial decision. A good budgeting coach could really smooth out the transition period and being there for your members is the heart of the credit union difference.

Sam Dicken
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