Saturday, February 27, 2016

Another item checked off

My conversation with the mortgage lender went really well. She was recommended by my boss, and from the emails and phone call I have had with her, she seems pretty awesome. I have uploaded all my documents to her and she went over quite a bit, especially explaining the construction loan process, should we decide to go that route. Even though we are moving 500 miles away, she is familiar with some realtors and home builders in that area, that she can refer us to.

I mentioned to her that since we have a bankruptcy (almost 6 years old now) on our credit, I wasn't sure if we were going to have to try to go FHA or not, for qualifying purposes. She just said "well that's why you now have a friend in the banking business". So, I took that to mean, don't worry about it.

The good news was, either way we go - buying an existing home or building - we can get enough out of our equity in this place for a required down payment. Minimum on regular mortgage on existing home would be 5%.  Minimum (and here was where I was concerned, as I had read 20% most common required for construction loans) for an all in one construction loan is 10%.  We should have a down payment in the 15-17% range, depending on how much house we end up with, so that part should not be an issue. Then we just have to hope we can quickly get to 20% equity, so we can have the P&I insurance dropped. I guess the P&I insurance is set up in brackets at 5%, 10% and 15%, so if we are in the 15% equity bracket, our P&I won't be as high as if we are in a lower bracket.

She said they will go up to 43% debt ratio, which puts me at like a $3500 a month payment (yikes!), since we don't have any other debt. Then she laughed and said, but what payment do you really want? LOL. I said in the $2500 range, would be doable.  She will have a pre-approval for us, probably next week, and then I'll know exactly, but it's looking like in the $400k range.

So, once we get the final number, we can get working on getting this place up for sale. Hopefully, in the next couple of months, at the latest. It will be really interesting to see how long it takes to sell our place. The market is really hot around here, but of course we are also dealing with our crappy neighbor's junky place, not to mention if people do their homework and research into the neighborhood crime statistics. Then they should run away as fast as they can!

We spent yesterday evening at a community meeting that our councilman and his assistant set up. He had sent out a flyer in the mail earlier in the week and I gave it to DH and said we should probably go, as a show of support for him. I reminded DH again about it yesterday, but he was feeling pretty crappy and didn't really want to go. It was from 4-7pm. I get home from grocery shopping at 4:30 and DH says the assistant texted him and asked if we could come, so we put the groceries away and off we went to a fire station meeting room. It was a pretty good sized crowd. And then of course assistant told DH that councilman wanted him to get up and speak about our drug problem, so there DH was again - speaking about it in front of a group.  It stirred up quite a bit of discussion. People are seeing what an epidemic it's becoming in our community, especially with all the theft all these drug addicts are doing. People were none too happy with the sheriff and lack of proactive policing as well as the soft policies that just put these people right back on the streets in a matter of days/weeks.  You should have heard the reaction when the councilman (who is one of 3 conservatives on a 7 member council) told of the plan to spend $10 million in taxpayer money to house all these homeless drug addicts, but NOT require them to be regularly drug tested while they live in free housing. Councilman said when he asked one of the pro-free housing council members why not - her reply? Well, it's their home - they can do what they want inside it!  Unbelievable! Liberalism at it's finest, eh?

I just sat there, listening to it all, but also just kept thinking to myself - hopefully we don't have to deal with any of this much longer.


  1. Good luck with house hunting. I will say that if you build your own that will be a true test for your marriage. So many decisions to make and delays etc.
    My husband & I survived building our own but it was not easy. The payoff is you get what you want!
    This is exciting for you for sure.
    Take care,

    1. Thanks for the good wishes! We survived over 20 years of my DH being self employed. That was pretty much hell for our marriage, so honestly, building a house really doesn't scare me at all. Sure it will be an annoyance and a big headache, but we've already been through hell and came out the other side ;)

  2. WOW! I'm shocked you'd go for such a large mortage - if you lost your job would you be OK for say 6-9 months living expenses? Are you financially on-track for retirement? Would this be a 15-year mortgage?

    1. I should probably clarify - the $400k is not the loan amount, that would be the purchase price of home. Depending on how long it takes to sell our place, I'm anticipating having at least $70k down payment and yes, definitely plan on a 15 year mortgage. I put money into a 401k, as well as my company does a matching and also a profit sharing contribution, so according to the adviser that comes to our office, I am on track. If I lost my job, it would of course be very tough, but I would also have my side job income, some savings and unemployment to get by until I found a new job. We are going to have to spend at least $350k on a home in the area we are looking. We are being very picky about what we will end up with. We are not going into any neighborhood that has dumpy houses, etc, like our current neighborhood is. We'll just end up with druggies again. We want as much property as we can afford, privacy and in an area of nicer homes. Still cheaper than trying to buy where we are now - where the current median house price is now over $500k.