"Hmm, this doesn't look too difficult..."

I think we really began to get serious about buying a house when I came across a sale on Luanda St in Sylmar, California, a little city about 15 to 20 miles north of Los Angeles. The property was listed at $250,000 or $275,000 and was a cute little 2 bed, 2 bath place with a small swimmer's pool and a beautiful green back yard. I was hooked.

"Well, Sylmar's not "that" far from LA and this part seems pretty nice," I thought, "and at $250, this is GREAT!"

So Renata and I discussed it a little and as we talked we both got the realization that this was actually possible. We actually can get a house in California! So the next day I googled, "mortgages" and got "Results 1 - 10 of about 47,200,000 for mortgages." Damn, 47 million results? This is going to be tough.

1st result; Lendingtree.com. Hey, I've heard of them. That's as good a place to start as any, right? Well...uh oh, the clouds parted and the sunshine of house buying streamed down and enlightened me that I really have no frickin' idea about any aspect of mortgages or homebuying. "What's the difference between 'pre-qual' and 'pre-approved'?" "What the hell is a point?" "Why are there two numbers(Avg APR and Avg rate) when you check mortgage percentage rates?" "What's PMI?"

Ok, so forget all that for right now. Let's see if I can even get a loan. Click click click, social security number, name, address, etc. etc. and soon the initial forms were filled out. Submit Now. Hmm, am I ready? Sure, what the hell? What's a few hundred thousand dollars? Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah! "Click"

Holy crap! I was approved. Great! ...and "damn." Why "damn"? 'Cause if I didn't get approved then there'd be no pressure, no monthly mortgage payments, no 30 year commitment. I had one commitment, my wife, and that was an easy decision. This, not so much.

So, what did I know at this point? What had I learned? Pre-qual, or pre-qualified meant little. A pre-qual letter and $1.85 would get you a cup of coffee. Pre-approved was where it's at. Pre-approved meant the bank actually checked your credit and your income and history. Pre-approved meant you had the power to actually buy. Pre-qual just meant you could print from your computer.

And PMI? Well that's Private Mortgage Insurance. That's money that you'll never see again. Basically you're paying for insurance not to cover you, but to cover the bank's assets. (insert many bad words here). And the two numbers when you check the mortgage rates? Still not quite sure...Renata's the money person. And points? That's a pay now or pay later option, one percent of the purchase price per point. Some lenders will knock a certain amount off your rate for each point you pay. I'm mostly clear on points, but being a typical middle class working couple we didn't have the money to buy points anyway.

More to come.
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