ScottSevener.com

(This post was originally written on Wednesday, June 20, 2012 – see the intro post for more details…)

It’s kind of hard to believe that we’ve really only been at this for less than a week because never before has life seemed to crawl by so freaking slow for me!

Never have I checked my e-mail so many times, in hopes that there would be something waiting that would finally see the process moving again.

Never have I felt like pretty much everything else in my life is just noise right now as we wait idly by for the next step to finally kick off.

Right now we’re waiting on some feedback from Mortgage Guy Who’s Not a Credit Union to see if we have other options to choose from there. It’s one of those times when you wish that the guy only worked exclusively for you, but as that’s not really the reality of the situation, instead here I am penning a surprisingly short blog post in a vain attempt to distract myself from watching the clock for a little while…

*checks mail yet again*

Nope, nothing yet.  😥

(This post was originally written on Tuesday, June 19, 2012 – see the intro post for more details…)

Today has been a little bit of a frustrating day, to say the least.

I’ve been going back and forth with the bank on our mortgage all day – it seems that we kind of got a bait & switch, in that they worked so hard to convince us that an adjustable rate mortgage was better for us than a fixed rate when we met with them last week, and now suddenly we don’t qualify for that one anyways and we’re left trying to choose the lesser of two evils between a fixed rate with more down, or the ARM with hella-lots of more down…

😥

So to back up just a bit, when we first started talking about whether or not we could afford to buy a house right now, we were already convinced that we absolutely had to have a fixed rate mortgage because we didn’t want to end up like so many people who found themselves bit by the bubble and out on the streets after they couldn’t afford their mortgage when their payment adjusted 5-years in.

Hell, the house that we’re looking at is technically a foreclosure, and it was last purchased back in 2007, so you do the math!

That said, we kept an open mind when we sat down with the guy at one of our local credit unions, and he actually painted a pretty convincing argument why we might want to go this other route instead. Although they had just discontinued offering FHA loans (which we would’ve needed because their online calculator didn’t make it clear enough what minimum down payments were needed with the various loans), they had a new ARM called a 5/5 that seemed to eliminate some of the problems that came with the traditional 5/1 ARMs…

Essentially, the way those loans work for anyone unfamiliar is this – for the first 5 years, you have one interest rate, and then on year #6, your interest rate adjusts to whatever current rates are at the time plus some modifier. For a 5/1 ARM, it will continue to adjust every single year from year’s 6 – 30 (or whenever you pay off the loan), and so even though the idea is that in 5 years you’ll probably be making more money and all, in reality a lot of folks saw their payments double and could no longer support them.

The difference with this 5/5 ARM was that it only adjusted every 5 years, and the increases were capped at 2% per adjustment and a max of 5% above your initial rate for the life of the loan. The rate that we were looking at was 3.125%, so that would’ve been capped at 8.125%, which is still a sizable jump…

…but it was going to be manageable, and I can say this with great certainty because I spent all of last night going through spreadsheets and crunching numbers and triple-checking that even in the event that we did hit our max interest rate after year #10, we’d still be able to make our monthly payment … admittedly begrudgingly because more would be going to interest rather than principal, but at least we’d still have a house!

Oh yeah, and did I mention that for this 5/5 ARM, the credit union was paying all of the private mortgage insurance, too?!

It sounded like a pretty amazing deal and just about everyone that we talked to, our agent included, said that we’d be nuts not to take advantage of it for the PMI savings alone! So we thought that we were all set, and then I got a call saying that our application had been denied…  😳

They needed to play with the numbers and double-check that we had everything right. Eventually they started getting back more positive results, but they were at a cost of putting down a ridiculous amount of money that we didn’t have and running the loan in my name only, without Sara being involved.

Frankly, I don’t like either of those ideas!

So anyways, after a long line of going back and forth, we’re down to a couple of options…

• the 5/5 ARM that we wanted, with a 3.25% interest rate, only in my name, with 10% down and no PMI
• the 30-year fixed that we originally wanted, with a 3.625% interest rate, in both of our names, with 5% down and PMI of $120/month for 7 years

The problem is, we don’t really have any time to change any of this stuff, so we kind of need to make a decision right now, and it doesn’t help that neither of them ended up being in the neighborhood of what we had planned. That PMI hurts because it feels like we’d just be throwing away $10,000 to interest payments before we’re done, and yet 10% down isn’t exactly an easy pill to swallow either when our planned amount was 3-5%!

I don’t know. We might have one other option … Sara talked earlier on with another mortgage broker who helped answer some of our questions early on, and even was one of the folks who told us that the 5/5 ARM was a great deal, so maybe it’s worth circling back to him to see if there’s anything that he can do for us now that we’ve found that previous offer not to be exactly what it had seemed…

And we need to do it all in a day and a half – no problem!!!  😯

(This post was originally written on Monday, June 18, 2012 – see the intro post for more details…)

Well I suppose that was a little easier than I had thought! 

We got word back from our agent that the seller accepted our offer. They had gotten several offers over the weekend, but ours was over the asking price so rather than prolonging it with another round of soliciting bids, they decided to just take ours.

We’re officially one step closer to buying a house!!!

It’s pretty relieving to see that our “strategy” actually ended up working, though! We had an inkling from the other lookers that this one was going to go quick, so the both of us had an idea that we needed to do something a little special to make our offer stand out … but neither of us know anything about real estate whatsoever, so it was hard to tell whether what we were suggesting was actually significant or merely comical when one is looking at such a large sum of money to begin with. We ended up offering a little more than 1% over their asking price – not a lot of money, but not exactly chump change, either, and we kinda figured that at worst, hopefully it would be enough to keep us in the running if the seller countered asking for more.

Now I should note – this is where our agent really did us good here because he was extremely fair and honest with us, giving us his opinions based on experience, without trying to pressure us to do one thing or the other. He suggested that with just the asking price, we probably had about a 50/50 chance of getting it, so if we could stand to lose it, we should just go in with the minimum. But if we really liked it, our proposal of a little extra was still pretty much in line with comparable properties in the area and would probably earn us some extra credit with the seller.

We also asked for the seller to contribute 3% towards closing costs, which I didn’t know at the time is pretty much standard, but my budget certainly liked being able to lessen the blow of those numbers!

Anyways, so obviously we don’t know what the other offers actually were … maybe they came in at list price, or I would guess that more likely they probably tried to low ball it because that’s what you always hear about people doing with real estate sales. I mean, on one hand it does make sense – you can never negotiate down, but you can always go up … and yet at the same time, I guess in a sense I’d also be concerned about insulting the other guy by offering him 70% of what he’s asking and wasting his time! And I know that this might be a little different because it’s a bank sale and there’s less personal ego involved, but even a strict businessman you’d think would get a little offended if you waste his time by offering him only a fraction of what his product is actually worth…  😕

That’s just me, though, but thankfully it didn’t have to come to that because taking the high road (literally!) seems to have worked out in our favor, and the part that seemed to me was going to be more challenging has (so far) actually fallen into place pretty easily. And you know what, I don’t feel like I got a bad deal, either, because sure, the asking price was 1% lower than what I’m paying, but I see a lot of value in this house that has absolutely nothing to do with dollars and cents. Plus, not for nothing, but the real estate market has been so convoluted over the last decade anyways that for me it’s really hard to judge whether a house is truly worth $100,000 or $350,000.

We’re not getting a mansion, and we’re not getting a glorified cardboard box, either. I think we really lucked out with finding a place at the bottom end of our budget that also has enough of the bells and whistles (and … regular stuff?) to make us feel good about dropping that kind of money on a place to live. Sure, we can still yearn for something more – you know, for when I write the next best seller or something 😉 – but in the meantime, this should work just fine and finally give us a place of our own that we can really settle into and call home…

Oh yeah – one more thing … WOOHOO – OUR OFFER GOT ACCEPTED!!!!!!!!!! 

(This post was originally written on Sunday, June 17, 2012 – see the intro post for more details…)

I think the gravity of this situation is starting to sink in because I haven’t been able to think about pretty much anything other than this house since we submitted the paperwork last night!

You see, up until now my wife had really been spearheading this whole effort – I never really took it very seriously because I didn’t think that we were financially in a place to do anything other than rent, so I guess I was kinda hoping that I could somehow just smooth things over with our landlord and everything would magically go back to normal where we figured that we’d buy in a few more years once we’d paid off more debt and had a chance to stick some actual money away for it.

I don’t really want to mill on that anymore, though, because it is what it is and hopefully this will end up being better for us in the long run…

It’s driving me nuts that we can’t move a little faster, though! I mean, I know that it’s Sunday and all, so the selling bank isn’t even going to look at our offer until tomorrow morning. And the credit union that we’re doing our mortgage through also isn’t available on weekends, so we can’t make any progress there!

Last night I spent some time trying to recreate the floor plans by sketching out walls on the building layout from the county tax appraiser’s website – one thing I wish I had done that we didn’t was take some pictures so that we had something more than just the 12 nondescript photos on the listing that don’t really do the place any justice at all.

Then again, Sara made a good point – hopefully they don’t do the place any justice so our offer won’t have any others to compete with come Monday morning! 🙂

It’s been a big roller coaster for us, though – we want to get excited, but not too excited in the event that the whole thing ends up falling through. That said, we’ve already made a mental list of changes that we’d like to make over the next 5 years, priced out the appliances that are missing, and decided where we’re going to put the Christmas tree, so…  😉

(This post was originally written on Saturday, June 16, 2012 – see the intro post for more details…)

Of all the things I didn’t plan on doing when I got out of bed this morning… 😉

The plan this morning was to go and look at a few houses, but there honestly wasn’t anything really spectacular on the list and if anything, I guess I was more expecting it to be a learning experience to help us get our priorities straight of what we actually wanted/needed in terms of square footage and so forth.  Plus, half the houses were in a part of town that I don’t even like, so there was that, too!

And yet a few hours later, my wife and I found ourselves pouring through 21 pages of paperwork to the best of our abilities before submitting an offer to buy our very first house.

It’s a little exciting, and a little scary … ok, so actually a lot of both of those things … but I think we made the right decision.  In total we looked at nine houses today.  Some were at the upper edge of our price range, and some were at the very bottom. A lot of them needed a lot of work! But we discussed the pros and cons of each one as we drove to the next, and of the three that we would’ve considered buying, I’d like to think that we did our due diligence in considering not only our needs now, but also 10 years on down the road, in terms of space, building a family, finances, recreation, celebrating holidays, out of town guests … all of it, really!

Ironically enough, the house that we picked was the second to the last one that we were to look at today. The one prior to it, we had actually expected it to be our top choice, but it was going to be a quick mover because they already had several offers and wanted to make a decision that day, and we just weren’t in love with the place enough to make that quick of a decision. Another a few houses earlier hit a lot of our high points and had some nice opportunities for improvements on down the road, but it was significantly higher and we were having a hard time debating the deficiencies for the extra money.

This last one, though … it’s a foreclosure, so it’s probably priced a little lower than it actually should be. It doesn’t have as big of a backyard as we would like … barely anything at all, really … but it still has a pool and spa, which are things that we’ve both gotten really spoiled with over the last year! The space itself seems like it’s really well laid out – extra bedrooms are away from the master, and we’ve got separate spaces both for a living room and a family room. And there’s not scads of junk in the garage, so we should both be able to park our cars in there!!! 😯

It also happens to be in the very same community that we currently live in – just a different subdivision about 10 miles away, so we already know that we’re happy with the area.

Anyways, it took a little scrambling to get everything in order because we were absolutely not prepared to make this kind of decision today, but we’re hoping that it ends up paying off because as we were getting ready to leave, two other couples had pulled up to look at the same house. In fact, our agent had even remarked when we got there that he was surprised it was still available because apparently it had gone into contract about a month ago and fell through at the last minute.

It seems like a pretty good deal – at least from what we’ve seen and also lived in for the last year – so I suppose at this point we just have to wait and see what happens. Sara made a comment at one point when we were signing documents that it was kinda crazy to be looking at paperwork that said we could be closing on our very own house within the next 45 days!

We should know by Tuesday if the bank is accepting our offer, so I’ve got a feeing it’s going to be a long couple of days…  🙁

Wait a minute – didn’t we already hear about this guy moving like three months ago???

Yes, yes – you mostly certainly did, but I guess you could kind of say that back when I was writing about my wife and I buying our new house, at that point you hadn’t really heard all of the story…

What I failed to share at the time was actually everything leading up to the actual move in itself – you know, all of the zany parts where we sat waiting on pins and needles for mortgage people to reply or waiting to find out if the inspector found an extra-large family of rats living in the attic or something! Truth be told, I did do a fair amount of writing about that whole process as well because I thought that it was worth writing about – I just wasn’t able to share it at the time because we hadn’t given notice to our landlord yet and should the deal have fallen through, we didn’t want to further complicate things by being out on the street should he chance to read about our extracurricular house hunting activities on the Internet!

But thankfully all of that is far behind us now, we’ve been living in our new house for a while, and I thought before we close the year out that I should probably get around to finally posting all of that stuff so that it doesn’t follow me into 2013 via my WordPress drafts folder! Needless to say, it was a very roller-coastery time – lots of ups and downs, and even more in the middles where we sat on the edge of our seats waiting for the next step to finally happen. In retrospect after talking to many other people who’ve tried to buy recently, I think we got extraordinarily lucky, in that our purchase literally took 45 days from first seeing the house until we closed on the sale. Hell, our new next door neighbors had apparently just moved in a month or two before us and they’d been working on a short sale for something like 7 months!

As we head into Thanksgiving this week, there’s no doubt that the simple fact that we were able to pull this off in such a short turnaround time with realistically very little push back is something that I’m certainly thankful for, and of course, I’m also very much looking forward to getting to decorate the new house with Christmas lights here at the end of the week, too!