h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

* begins a macrame project, with time to wait ... *

OK, no official news or anything yet, but I did at least speak with the second lender yesterday. They accept credit references from utility and insurance companies, cancelled rent checks, etc, for purposes of determining payment history. So I can easily get what I need to qualify for an FHA insured loan. That'd preclude some condos, as their associations may have bylaws and FHA have certain requirements, but one can always try for a spot approval. Townhouses and single family homes are always approved provided they pass inspections. And I wasn't looking for a real fixer-upper anyway- I'm not that handy and I don't have the patience for numerous extensive renovations.

We're going tomorrow evening to look at a few places.

Will post back with updates.

I so want to go with you to look at places. I'm curious that way - or perhaps just nosy

Oh, I am totally nosy like that, too. And I doubt they'd let me bring my own camera to anyplace that's not vacant.

Can't you say you have to set up a webcam link to a consulting (almost-)architect?

I don't suppose it ever hurts to ask.

Well, we won't have an official response till a bit later, but the second lender we spoke says it looks like we'll have no trouble qualifying for an FHA insured loan. We won't get a conventional loan because K once let his student loan lapse (when he should have deferred payments) and the government doesn't mess around with warnings and collections attempts- they just slap a levy on yo' ass and that goes on your credit report.

Sort of 'First strike and you're out. For life.'

Well, not for life- once the item is reported as being current, after seven years it drops off your report. Plus every on-time payment squeaks your score up a bit more.

I'm processing a payoff for my student loan balance today, freeing up a bit more for monthly payments. Then within the next few months my parents are giving me some money- equal to about 1/3 of the bequest from my Gram. They bought my sister a new car and are giving me cash to equal the value of that car. So not only do I know we'll have closing costs covered, and a decent bank balance after it's all done, but we may be able to put a bit more down, too. Yay.

And have enough left over for a Eurotrip.

Well, some of the places I'd wanted to see are apparently already under contract. If I hadn't wasted almost a month jumping through hoops for that wholesale lender, I might've had a chance to see some of those.

We're meeting in an hour and a half at a house that was on my list of places I didn't really have any interest in, because it doesn't have central air. But on the other hand it's a repo so it's priced pretty low. Unfortunately I don't think it has had an inspection yet.

OK.

The first place we looked at was a house. It's in need of a lot of work, but has character. Unfortunately I don't see it getting FHA approval because the chimney leans and has been shored up with wood. Shame, really, because the place has a huge unfinished basement and a large attic area, both of which would be great for storage, etc.

The second was a townhouse that didn't blow either of us away, but it may have been down to the a/c not having been on and the place being extremely hot and stuffy.

The third was the first place I really fell in love with that I started this journal about. Well, the place is great but the neighborhood's a bit dodgy and I'm not sure how comfortable I'd be walking to and from the train.

Fourth, and last, was a condo just south of where we live now. Third floor unit of a three-story building. Three bedrooms, two full baths, a separate dining room/den, small balcony porch, exposed brick wall, and a fireplace. Problem is it was a foreclosure, and the previous residents trashed it a bit. Floors in two rooms need sanding and refinishing; walls in three rooms need plastering and repainting; cabinets are missing hinges (since they have glass panels I assume this was sabotage, hoping they'd fall on someone and break); all of the appliances (fridge, stove, microwave, dishwasher, washer/dryer) were removed and would need to be replaced; master bath tub needs cosmetic repair; most of the windows are borken and need new glass.

The good thing is that the home is priced at just 75% of what we requested for financing, so we may be able to get a supplemental loan from FHA, as they do offer special mortgages that include repairs/renovations, especially those needed to get homes up to code.

I'm seriously considering this one...

Why not? It sounds like it won't cost you more in the long run, and while there will be some hassle involved, you'll have the advantage of getting it like *you* want it, rather than what happened to be there.

Guess it will be nice if you and K are of the "house repairing type" or hire someone to repair it for you.

We wouldn't be able to do any of the work ourselves- it would have to be done by a FHA-approved contractor, and the money would all be payable directy to him. The appliances would have to be installed by a similar contractor.

I'm not too uncomfortable divulging a few of the "personal" details here. So:

They're asking $157K. We anticipate being approved for around $200-$250K- but for this kind of loan, often the lender will estimate what the home would be worth once the necessary fixes were made. We estimate the value of this unit, with the windows and appliances fixed and the floors and painting done, at around $300K. We estimate repairs and appliances would run around $35K-$50K. Our realtor is going to try to negotiate reducing the asking price a bit more, and also get the seller to pay for any inspections.

In the meantime there are at least 12 other places we're interested in seeing.

Oh, the biggest hassle IMO is that none of the funds for remodeling would be dispersed until after closing, so we'd have to continue to pay rent on our current place *and* pay the mortgage on the new place for as long as it took to finish the work (I can't see it taking any more than a month, if that long), unless we wanted to live in it while the work went on. But FHA would not allow us to move in until at least the windows, electrical outlet covers and appliances were intact.

>We anticipate being approved for around $200-$250K- but for this kind of loan, often the lender will estimate what the home would be worth once the necessary fixes were made.

By that I mean to say that, with the understanding that it's quite likely that if/when we sold, it would be for more than what was originally borrowed, the lender might be willing to risk loaning a bit more than we'd normally qualify for in order to allow for the necessary "improvements". It would just then be a matter of negotiating a monthly payment we can handle.

I'm wiring payoff funds for my existing loan balance today and that should clear by the 4th; my parents are mailing me a check to cover that payment today. So starting with August, I'll have an additional $400 a month to put toward housing.

You have to get contractors to install appliances and sand floors? Even I can do those. Not plastering, mind.

Floor sanding's quite fun, actually. You get to push around this big, noisy lawnmower thing.

Good luck!

Seems house buying is an entirely different process in every country. It's even totally different between Scotland and England.

We only need to use an approved contractor because we need to get an FHA insured loan, and they are very picky about what they approve. We can't get a conventional loan because we can only put about $25K down.