Like 41% of First-Time Homebuyers1 – Sadie & Chris Madison almost made a fatal error when buying their first home.
We sat down with them for a candid conversation one Sunday afternoon – this is their story.
Just like a lot of couples our age we were fed up with renting and wanted a place of our own, began Sadie.
A place to call home… have friends over for BBQs … play with our kids in the backyard. Gaze at the night sky and watch the seasons change – you know, the homely, simple life.
But, with my crippling student loan bills and costly daycare for our little one, owning a home felt so far away.
While making a deposit at my bank one day I noticed a flyer in an office window.
“Stress-Free Home Loans” … or something to that effect, it read – recalled Sadie.
Low and behold, here we are, getting ready for our 9:00 am appointment with the Loan Specialist.
It was finally happening!
But then the bitter reality set in…
I had my heart set on the perfect little place in St. Matthews.
Our budget had different plans for us.
Based on some of my research we’d most likely have to settle for a run-down fixer upper in Parkland instead.
The house was not a complete loss – but parts of it were totally hideous.
You know it’s not a great beginning – when you have to start dumping money you don’t have into a place you can barely afford… Chris chimed in.
Our finances were already stretched paper thin, and if we had to start spending money on repairs right off the bat – we’d be living on mostly Ramen and Mac n Cheese.
I wasn’t in a hurry to start re-living my college years, you know… said Sadie with a long sigh.
It was around 8:30am – the car had been running and we were halfway out the door when my phone began vibrating in my purse.
“Are you coming out with us tonight?” rattled the voice through my Iphone’s speakerphone. On the line was my longtime friend from school, Jolene.
“Sorry, Jo Jo, Chris and I are on our way to the bank to sign the loan papers. Gotta watch our budget now – we’re finally pulling the trigger on that new place.” hurriedly replied Sadie.
“Wait, did you just say you’re getting your loan from the bank?” Jolene snapped.
“Yeah …why?” Sadie asked…
“Because when I was in the process of getting my house – my dad saved my skin when I told him I was about to use the bank for my loan.” Jolene replied…
“This felt like one of those surreal moments in a movie, when something big is about to go down … then this divine intervention takes place.
To top it off, Jolene seemed so authoritative on the subject – I had to hear her out…” Sadie remembers.
“What Jolene laid on me that morning – hit me like ice cold bucket of water on a 90 degree day:
I was literally 30 minutes away from falling for the oldest trick in the book.” …timidly admitted Sadie.
“On that brisk October morning my awesome friend Jolene saved me and my family from financial ruin – and from having to settle for a house I wasn’t thrilled about in the first place…”
Moving quickly past the small talk, Sadie wanted to know how Jolene went about getting her mortgage loan.
“The most painless way to go about it is through a mortgage broker, NEVER a bank.” Jolene began…
Say you’re about to go on vacation. If you don’t know any better you’ll probably just show up at the airport and go straight for the first airline counter in your line of sight.
It goes without saying, but I’ll say it anyway, you WILL pay through the roof compared to going with a site like Expedia or Google Flights instead.
Think of the bank as that random airline. They only have one or two majorly OVERPRICED options or “loan products” – on take it or leave it basis. You either sign on the dotted line or you walk out the door.
There are no discounts, no negotiation and no wiggle room for a better deal.
Bank’s policies are as stiff and rigid as its lobby atmosphere…
What I did, and what YOU should do is go to a seasoned mortgage broker.
A mortgage broker would be like going to a travel website instead of a random airline. Travel websites are known as aggregators. I.e. They have a handle on HUNDREDS of flights. That’s exactly what a good broker is: an aggregator of mortgage loans. They have a handle on multitude of loans, all shapes and sizes.
A competent mortgage broker can custom tailor the most fitting loan for you.
[Tip] Let Kentucky Rumble match you with a mortgage broker.
Good mortgage brokers know their loans inside and out – like true Kentuckians know their Burgoo…
They know how to get you deep discounts because they’re industry insiders.
They have that special sauce to get you into your dream house by getting you the most fitting loan (and the best possible deal), that NO bank can touch.
…Jolene finished her rant, nearly running out of breath.
That was such a wake up call. I had no idea about such startling difference between a bank and a brokerage. …recalled Sadie.
“Needless to say – I ditched my bank appointment like a bad blind date. That same afternoon Jolene, my husband and I were on our way to a brokerage.
Not only did I score a better interest rate by going with the broker – I ended up snagging the house in St. Matthews I’ve had my eye on from the start!
As a cherry on top because our monthly payments are so much lower now, the cash we have left over every month gave us the ability to furnish our new place with all new appliances.
It’s hard to beat the feeling of a modern washer and dryer…
Far from the malfunctioning junk we used to have to stuff our clothes in at the rental unit! … Chris scoffed re-living a painful memory in that moment.
Every now and again we’ll splurge on occasional treats like spontaneous getaways and dinner nights at “fancy-schmancy” Italian restaurants. I love Italian!” …Sadie confessed with a cheerful giggle.
This holiday season – if someone you know is looking to become a homeowner, give them the most valuable gift: Share this story with them. (trust me, they’ll appreciate you for the rest of their days)
Don’t let your friends and loved ones make the same mistake that nearly HALF of First-time buyers make.
Friends don’t let friends fall prey to the greedy banks! ?
Angie is a Mortgage expert writer and recent mother of two. When she’s not pecking at the keyboard bringing you all that great info — she can be found in her backyard hot-tub, deep in action packed fiction novels, or playing catch with Joey, her brown lab.
1. 41% of first time buyers regret not knowing all their loan options, according to a Nerdwallet survey.