Wednesday, June 6, 2012

Mortgage Woes

I don't think she is looking for a dream house, just a place to start, and perhaps remain for ten years, or maybe if the economy crashes, forever.  The dream house dream, is just gone.  (Photo:
     Our daughter continues to seek a mortgage banker who can help her to close by her contractual closing date.  Today, our realtor and the former banker sent us to a woman who is a mortgage broker and who specializes in non-conforming loans.  Our daughter needs a loan where the company writing it, does not plan to sell it immediately, as many do.  She is presently getting her ducks in a row in order to provide sufficient documentation to get the new loan.

           This is a rare case however for lots of reasons.   In the past, many people have bought homes in which they are virtually assuring that they will be in over their heads.   Our daughter is buying a home, which once purchased, will have a lower payment than if the same house were rented.  This makes sense and is of benefit to her.  She realizes that electricity, internet, food, phone, maintenance, etc. will all swell her anticipated expenses there.  Her back up plan, is that if she loses her job, she will come home and rent out this house. This would certainly be very sad and stress provoking, but it would prevent a foreclosure.

           What is interesting to me is that in my many travels this week, as I see friends, complete purchases and projects here on the farm, people ask about her, what she is doing now, and how things are going.  I have told a few of them of her mortgage issues.  Interestingly, almost everyone I talk to is on the edge of buying a home or a foreclosed home, or has an adult child who is.  They are all too scared to progress right now, citing such financial and market uncertainty, and job uncertainty also.  I am especially privately surprised to see so many people I consider fairly wealthy choosing not to move forward, and to sit and watch.

Update:  The original company which changed their underwriting guidelines while our daughter's loan was in underwriting, ultimately referred her to a mortgage broker at another company..  The mortgage broker has a number of groups she works with, where she can place non-conforming or more difficult mortgages. She really earns her money !  Despite delays due to one thing or another, including a storm which took out the electricity at the mortgage bank for a week, it appears that the loan will be funded and closed in July.  Others may be choosing to sit it out and wait, but our daughter moved full speed ahead.


russell1200 said...

I found out that it is not always that easy to tell who is wealthy.

The only sure way is to see who has an obvious cash flow, and lives a lifestyle way below the norm for their situation.

A lot of people who look wealthy have csshflow, but spend it as fast as they get it.

JaneofVirginia said...

I don't know that without someone providing an assets and balances sheet that any of us can judge wealth based on externals. I know many people who are quite wealthy, but who live in the small home they have had for many, many years, prior to inheriting land and cash. (A lot of third and fourth generation farmers and ranchers fall into this category) They clip coupons and drive old trucks. Then, I know people who certainly LOOK wealthy, but little would have to change before they lost everything. Use patterns of money only determine use patterns, not wealth. Good point Russell.

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JaneofVirginia said...

Mark, Normally we stick closer to practical, reasonable perspectives on preparedness issues. However lately politics has been directly impacting our preparedness concerns and some of that has spilled over into this blog. Normally, we don't talk a great deal about mortgages, but many people with an interest in preparedness still seek a rural home, and so topics which encompass rural real estate issues becomes not only fair game for blogging, but very timely as well. I also still believe that real estate, as long as one can afford to carry it, can still be a fine investment in the long term, as well as a great aid to general preparedness.

Mark Steban said...

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JaneofVirginia said...

Mark, Glad this, and hopefully the other posts are helpful to those who read them. I would hate to think that some of the more difficult lessons I have learned around the farm, and in life in general, were wasted ! Best wishes.

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JaneofVirginia said...

I updated this post this morning. She has finally found the right mortgage through a mortgage broker and should close shortly. It has been a difficult ride from a mortgage standpoint, but she is getting a lovely home which is an excellent value. It was worth all the work and difficulty.