After weeks of drama, it looks like we're settled into a process that will in fact land us in a new house in five to six months. Our mortgage crisis appears to be over.
The builder put me in touch with a local lender, and a Facebook friend put me in touch with a broker. Both spoke firmly without their heads in their asses, and arrived at the same conclusion. Since the house wouldn't be finished until a month or two into the new year, no lender would close the deal until then anyway. By that time, I can file my 2013 taxes, which would demonstrate the same level of income I had the last three years, only most of it would be from 1099 contract work. The stars would align, and it would validate my excellent credit scores and good financial character. This lender and the broker confirmed what I had been saying all along: The underwriters had no idea what to do when they went off script.
That was only half of my concern. The other half was with the builder itself. They had a deadline to secure financing one month after contract. That was already weird, since the lender isn't going to give you an interest rate until you're close to closing anyway. If I wanted to bail entirely and get the deposit back, I had to do so before the "financing deadline." So there was no way I was going to let that deadline pass and cross my fingers that a lender would cough up the money six months from now. I can't predict that future.
Today the builder let me know that they've basically moved that deadline out to February, when the house is done. So if the entire mortgage industry takes a dump in that time, I can still get the deposit back, and they have a finished house to sell to someone else. We can all have a group hug now. They have permits, and plan to break ground any day now.
In the mean time, we went through the three-hour exercise of choosing options a week and a half ago, and managed to only go $1,500 over budget. That's partly my fault, because I wanted a frameless glass shower and a massive stainless kitchen sink. But we changed a few options, and now we're about $300 under budget. That's good, because every dollar is one we don't finance. We go back this weekend to finalize it all.
The most expensive things we upgraded from the base options were carpet and hardwood for the master bedroom. We are doing granite in the kitchen, but it was an inexpensive upgrade because they were starting with a nicer substance to begin with to keep the neighborhood up in value. The rest of the spending was on stuff that's too much of a pain to do later, primarily electrical stuff. For example, wiring a ceiling fan in the extra bedroom or having a switch for a pendant light in the kitchen is easier when there is no drywall up.
I think I'm pretty happy overall with the decision to build, but I'll still have some level of purchase regret. It's a lot of cash to put into something of uncertain future value. But again, if i approach it from a cash flow perspective, it's a little less than renting less space, and I can still devote money to savings and investments. It's such a different environment from 2001 when I bought my first house, and the house was the investment where your money was working for you. Now I view it more as a lifestyle choice.
Should be fun to see it go up. I hope not to move ever again after that. Not really, but 15 years would be OK.
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