Thursday, November 08, 2007

Big Decisions and a LOOONG post

Over the last several weeks - our minds have been an absolute whirl of activity. In between all the baby stuff we've had to think about, we've also been immersed in the exhausting world of finances.
You see, back at the beginning of summer...we spoke with a mortgage lender just to see where we stood on purchasing a house. Since we got married, we'd been telling ourselves there was just no way we could do's too expensive here. We took a few trips out of state to less expensive areas and despite our best efforts - even going so far as to meeting with realtors, we just never found a place we felt was right. We found many possibilities...but we always told ourselves we'd much rather put our roots down here. Little by little, the housing market began to taper off, and slowly the prices were moving down. So last July, after talking to this mortgage lender...we walked out of her office feeling alot less discouraged and like we actually COULD possibly buy a house someday in the future. We decided to start living as if we were making the lowest house payment quoted - just to see if we could do it. The nice part was realizing that we could make that payment without seeing much of a dent in our current finances...little changes here and there in our spending habits made it possible without being overwhelming and feeling like we have to mac and cheese every night.
The affordability of an actual house wasn't even a thought...because we knew we'd most likely have to buy a condo or a townhouse first. The problem was finding one with a big enough yard for Georgia...and one with low enough HOA's to make it worth our while because those fees can really put a damper on a mortgage payment. It was CHALLENGING to say the least - we looked at condo after condo and tried to decide what we could live with and what we were willing to sacrifice to be homeowners and get our foot in the door. It was slightly disheartening to look at certain places that we were really run down and needed alot of work - or just had a balcony or a tiny little concrete pad for a yard. I always imagined my puppy looking at me through the glass with sad eyes because she didn't have a place to play...or I'd imagine our future kid not having any outdoor space to play and burn off energy. I think the outdoor space was one of the things we struggled with the most during this house hunting process. We also looked at a few mobile and modular homes thinking that might be a better option....but the interest rates are so much higher on those because they depreciate in value - so we really didn't feel like that would be a good investment. The few prospects we actually liked and were willing to live with would usually end up being discarded because the HOA fee's were so high...and of course there's no cap on those, so we could move in and they could raise it $100 a month and there wouldn't be a thing we could do about it. We kept an open mind and from time to time we'd scan the MLS and the real estate papers more so because it was fun and exciting to imagine the time when we could actually buy something of our very own.
Then I found out I was pregnant - and we figured this whole house buying thing was gonna have to go on the back burner for a while until we knew what would happen with my job and our expenses, etc, etc.
Back during our initial search, we stumbled upon a tiny little house about 5 blocks from where we are looked so cute from the outside, but it was waaaaay over our price range, the pictures online didn't thrill us, and the location wasn't we shrugged it off. Well, over the last few months...we noticed that little house was still on the market and the price kept going lower and lower. Finally, in September, it dropped into our price range - and we toyed with the idea of it, but didn't pursue it thinking about the size and location. About a month ago, we noticed it STILL hadn't sold...and so we decided to call a realtor and at least see if we could go look at the inside - figuring it wouldn't hurt.
Turns out - we walked in and fell in love with the place. It was built in the 50's, has been immaculately well kept and has all new dual paned windows and new doors and new paint and it's just a cute as can be. The owner still lives there, so it's always interesting trying to imagine your own furniture and things in a space....but we both realize that it feels alot bigger than it looks from the outside and while a 2 bedroom - 1 bath house overall is alot smaller than what we currently live in - we knew that we'd have to downsize if we were going to invest our money in something. The bedrooms seem bigger than the ones we have now - and it's got a YARD - all fenced off and everything! The yard itself is not huge - but it's plenty big enough for our pup and including the side yards, we feel comfortable that it will fit our needs. I could even have a garden back there!
We went home filled with such excitement about this house....but in the interest of not wanting to be blinded by the cuteness of the place - we decided it would be a good idea to have my parents come by and see it for themselves. We knew if anyone would tell it to us straight - it would be them...especially my dad, who can be brutally honest when it comes to financial decisions and structures and resale potential.
So the following day, I met my parents with the realtor and they took a walk through the house. I was very quiet - just waiting to hear their opinions as they VERY thoroughly looked through every room - dad went outside and inspected everything he could, and mom was inside opening closets and cupboards and drawers.
We stood in the backyard and looked at the house....and I tentatively said "well??? what do you guys think?"
and they said "it's's a good's definately going to appreciate in value...if you can buy this house - DO IT"
I couldn't believe it - I honestly expected a barage of negative comments, but they LOVED the place!
In fact, after I got back to work - they called me and said "so did you put in an offer yet?"
So - we decided to start seriously "shopping for mortgages". Now, 3 weeks ago - neither one of us knew squat about mortgages, so I got some books from the library...and now, after so many meetings with different lenders and asking a TON of questions and providing TONS of financial paperwork and asset information to the lenders, we now know more than we ever thought we'd know about mortgage loans. The first thing we learned is that dealing with mortgage people is alot like dealing with car can't let them talk you into ANYTHING. They want to get the most money possible - but we want to borrow the least money possible.
Plus, this whole experience has really taught us to go over our finances with a fine toothed comb and how important being in just the right situation is. Without even realizing it - we've built up a good credit score, obtained a 401k, 3 cars paid in full, and lowered our debt enough to not be an issue with any lenders. We keep hearing that loans are getting harder and harder to qualify for because of all the foreclosures in the we've been simply amazed to be approved with every lender we've spoken with.
In between all these meetings and emails and phone calls - we've also looked at other houses, just to keep our options open for more potential drops in price...and of course gone back and forth about making an offer on the first house.
We kept thinking:
"we're just about to have a this the right time?"
"what if the market bombs even more and we could get a better deal somewhere else?"
"what if the closing costs and fees are more than we can handle?"
"are we getting in over our heads?"
"is it smart to jump into all this right before the holidays?"
"Should we wait until we have a bigger buffer/emergency fund built up before we take a plunge like this?"
"what we wouldn't give for a crystal ball right now!"

a million different scenerios entered our heads and we scoped out every possibility both good and bad. It's really important for us to do this on our own without any financial help from family - and while at one point, we didn't think it would be possible otherwise...we've since learned differently and I'm SO GLAD we proceeded to ask questions and talk to a broker to find out exactly where we stand. It would have sucked to borrow money from family and have that hanging over our heads, when it wasn't actually necessary in the first place, you know?

A few days ago, our realtor called - and despite the fact that the seller's agent knows we're interested in the house...the seller again lowered the price - a full $10k lower than her previous asking price. I couldn't BELIEVE it. So every loan we'd been approved for was based on the first price and anything lower will just be icing on the cake!
Hubs and I talked and talked - and decided that this kind of deal doesn't come along very often and we should just start the process and see what happens. We met again with the lender we felt the most comfortable with who drew up a loan plan that works in our favor and that we feel comfortable enough with to make an offer.
SO - after so many questions and paperwork and money stuff going through our heads...tonight, we will be meeting with our realtor...signing a deposit check....and making our FIRST offer on our FIRST house.
I can't wait to see what happens!
We're really lowballing an offer to start with - so we're not expecting her to accept it...but we're curious to see what she counters with.

This is all so nervewracking and potentially life changing. I'm not sure what's harder...deciding on whether or not to buy our first house - or having our first child!

No comments: