If you know me enough to be Facebook friends with me, then you know that I've been having an awful time trying to get a loan for the house we decided to build. In the general sense, you might think that's not totally unexpected in the post meltdown environment, but if I tell you about my situation, it's likely to raise a few WTF's.
Picture the basic documentation I give to get "pre-approved." Credit score of 780, very significant earnings the last three years, no significant debt, a mortgage about to be paid off for a previous house, never a late payment on anything, ever... picture of a fiscally responsible person, right?
But the problem is that they can't understand or accept that I've been doing contract work, and will continue to do so through the rest of the year. Nevermind that it's fairly typical in IT circles to work on contract, that it tends to pay between 30 and 100% more than similar salary positions, and if you're even remotely average at the work, you will never have an issue finding work. The recruiting calls never stop. This is why I encourage people, especially younger people, to seriously consider looking into software. It's a worker's market, so to speak.
So it's true, I might not have this job in six months. They could extend it, they could make it full-time, and that's pretty common, but it can't be guaranteed. The industry that used to give out money to anyone with a pulse, and especially to people buying more house than they could afford, has such a tight script to follow, that they can't figure out what to do with me, so the underwriters scratch their heads (or maybe their nuts) and just say, "Sorry, can't help you man."
The last rejection I got, from a local credit union, simply responded that I took a loss in the last two years, with so much expense that I only made $600. I can't even figure out how they arrived at that conclusion, unless they only read the Schedule C from my tax returns. My little hobby business doesn't make a lot of money, and I spend most of it on the toys to build web sites, and travel for events. It's like they skipped over gross income line from my regular day jobs. Idiots.
I'm more jaded about real estate now than I've ever been. In 2009, and the two years after, I couldn't sell my house because the entire market took a shit. That's because morons lived outside of the means and bought McMansions, banks were dumb enough to lend them the money, and government encouraged the behavior. Now, I can sell the house, but lenders were such a victim of their own stupidity, that now they follow a narrowly focused script. That's because morons lived outside of the means and bought McMansions, banks were dumb enough to lend them the money, and government encouraged the behavior. All of this stupidity is still affecting me, even though I've been a fiscally responsible adult.
Not sure what's next. The builder is putting me in touch with another lender, locally based, and we'll see what they have to say. Tomorrow we start picking out cabinets, flooring and such. If we still can't borrow, we bail and get our initial downpayment back. We could put more cash into a house if we were being creative, but with the markets up something like 15% this year so far, that would be cosmically stupid.