Lending Loser

Ok, so the title of this post isn’t exactly positive.  Actually, my last few posts on here haven’t been positive, which is not normal for me.  I’m usually a really upbeat person, and even though life isn’t always sunshine and roses, I try to see the best in each situation.  And, well, I guess if you read through the posts, you will see that even on a bad date, I find ways to make it funny.  Or, when dealing with bad neighbors, I try to see the silver lining in starting the home buying process.  So that’s a good thing – turning a bad situation into something positive is still in keeping with the way I try to live my life.

Last Monday I had an appointment with a lender that a colleague of mine is using.  He absolutely loves this woman, and couldn’t speak more highly of her.  The list of documents that I needed to bring with me to the meeting was daunting, to say the least:

• teaching credential
• employment contract
• 3 months of paystubs
• 3 months of bank statements
• 3 years of tax statements
• 3 years of W-2 forms
• rental agreement
• social security card
• passport

Whew!  I had to bring the teaching info because I was trying to get one of the special loans that my city offers to teachers.  I found an accordion divider that held everything perfectly, and was proud of how organized I was.  There was a slight moment (or hour) of panic when I couldn’t find my 2008 tax forms, until I realized that I e-filed last year, and had it all on the computer.  I tore my files and drawers apart looking for it, but hey, at least those are totally organized now.  LOL.

So I walked into the office very confidently on Monday, knowing that my credit score was good(ish) and that I had all of the necessary documentation with me. The office isn’t too far from school, and although they kept me waiting 15 minutes, I still felt good about the meeting.  CM greeted me and apologized for the delay, explaining that she had been out of the office a couple of days the week before, and was trying to catch up with everything.  Not a problem.

We headed to her office and began the process of filling out the loan application, reviewing my documents, and seeing what type of loan I could qualify for.  All of a sudden CM says, “girl, you make too much money!”  WTF?!  I have NEVER, EVER heard that phrase uttered regarding my income.  I’m a teacher, for God’s sake.  Is she nuts?  When I asked what she was talking about she said that I make too much money to qualify for the teacher home buyer loans.  How the heck is that possible?  Yes, I finally earn a decent salary, but I’m not making the top of the payscale yet.  Something seemed strange.  Then she mentioned that I also made too much to qualify for my city’s new home owner loans, as well.  ???  I had never heard that those programs were tied to money.  You’re either a first-time home buyer or you’re not, right?  What does money have to do with it?  Does  this mean that doctors and lawyers wouldn’t qualify either?  Because I can guarantee you that they make more than I do in the first few years of the profession.  Again, this info made me doubt her.

She did say that I could qualify for one type of loan offered through the teachers’ retirement system in California.  Ok, good.  They could give $55K, but it required that I had at least $3K of my own money.  Why?  I had already told her that my parent said they’d give me $10K if I really needed it.  When I asked if the money had to be my own, or if it could come from my parents, she said, “no, it has to be yours.”  When I asked her what difference it made, she said, “well, they’ll know if it came from your account or someone else’s.”  Really?  If it’s in my account, I think it’s mine, right?

Then we came to the part of the application where they were asking ethnicity. Her computer was set up in such a way that she had a screen that she could look at, but she had a 2nd screen that was facing me.  She began to check “Hispanic,” and I immediately corrected her saying, “I’m not Hispanic, I’m Italian.”  And she said, “well, maybe we should keep it as Hispanic, because you might get more money that way.”  I was FLABBERGASTED.  I told her that I wanted her to mark Caucasian, because that’s what I was.  I mean, here is the same woman who not 5 minutes before told me “they” would know if the money was mine or my parents’ yet she was now asking me to falsify my ethnicity to get more money?  Wouldn’t “they” also find out about that?  While we’re at it, why don’t we just put down “Native American,” since there’s probably even MORE money for them.  It’s ludicrous.

At that point she’d lost me.

She ran my credit, and the score was a lot lower than the one that I had run on myself.  I guess my car loan finally showed up, and at the beginning of any loan, it lowers your credit, until you establish a good payment record.  She said, “boy, I wish you’d talked to me before you bought that car because I would’ve stopped you.”  I told her that even if I had talked to her, I would’ve bought the car anyway, because my lease was up and I needed a new one. At that point I just wanted to see what the numbers said.

She  told me that I’d have to come with $20K of my own money and that I qualified for a $325K loan.  Now that may be a lot where you live, but in the Bay Area, that’s nothing.  Seriously, I can’t get a nice condo for that amount in any part of the city that I’d want to live in.  And I don’t want to downgrade where I live and find myself in an unsafe situation.  There are problems with where I live now, but at least it’s safe.  And I don’t own it, so there’s no long term commitment.  Plus, the mortgage payment would be $2100 (including $300 in HOA fees), which is a lot.  If I’m going to pay that much on a mortgage, I want to live in a really beautiful place.  After she told me this terrible news, she also said that because of my credit, I’d need to buy $13K in points to cover the closing costs.  Ok, so I have to come up with $33K of my own money on a $325K loan?  That’s 10%.  These days, people are putting 3% down.  Where are those loans?

I left her office telling her that I wanted to wait. That I didn’t have the kind of money she was talking about, and I needed to discuss all of this with my parents.  But really I just wanted to get out of her office.  She seemed so shady and I really wanted nothing more to do with her.  At all.

So here’s where I am: I’m going to stay here for the next several months and pretend that I’m paying $800 more in rent than I am.  I’m going to put that $800 in my savings account and save up some money.  Plus, it will mimic what my mortgage payment would be like, minus the HOA fees.  It will be good for me to see what my lifestyle will be like with that sort of mortgage payment.  I’ll be able to realistically see if I can really afford to buy something.  I know that by not buying this year I’m losing out on $8K in tax credits, but that’s the way it goes.  Maybe there will be a tax incentive next year, too.  And if not, so be it.  This is not the type of decision that I want to rush into.

By waiting for a while I’ll also be able to build up the credit a bit more, which will help with the amount a bank is willing to loan me.  I also want to consult a few other lenders/mortgage brokers to see if what this woman was telling me is accurate, or if she was out of her mind.  I want to make sure that I go to someone who is trustworthy and who has integrity, neither of which I felt in this woman.

They say that everything happens for a reason, and I think it’s better for me to wait right now.  I don’t want to move around the holidays.  Also, I just found out that I can’t get out of my 1-year lease, so I am stuck here until next October, unless I break the lease.  Which I’m totally willing to do, but I think I’d rather not have that added stress during the holidays either.

So, for now I’m still a renter.  Still dealing with noisy neighbors, but things have calmed down next door a bit, so I think I’ll be able to live with it, for now at least.

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Bad Neighbors, Good for Me?

Ok, so let me say first of all that I don’t consider myself an old curmudgeon in any way.  I’m a fairly tolerant, open-minded person, but I do like to have a sense of orderliness and peace around my home.

Recently FavNeighbor and her hubby moved out because they bought a condo.  I was so thrilled for them, but so sad for me, because they were amazing neighbors.  We had similar schedules, similar expectations, and similar lifestyles.  We liked to keep our duplex neat and orderly and we were friends with each other.  We got along so well, and I guess I sort of forgot that it’s not always that way with neighbors.

The place was vacant for a few weeks, and I spent that time wondering who was going to move in next door.  It is important to like and trust the neighbors that you share a common wall with.  Not to mention the fact that our backyard is a common space, as is our basement.

Very few people had come by to see the place, and I was worried that the management company might start to get desperate to rent it out.  My fears were warranted, as it turned out. I should mention that the management company was anxious for me to sign the new lease to my house.  I was glad to do it, especially because I found out they weren’t going to increase my rent.  I was really dumb not to wait to see who was moving in next door, especially because my lease wasn’t officially up until September 30th.

Tuesday I arrived home after a “koffee klatch” with Ish, to discover a bunch of plants, a medium-sized dog, and a bunch of backpacking equipment in the house next door.  No people.  I wondered what was going on, since I hadn’t been told that anyone was moving in.

Later in the evening, two people arrived.  One guy in his mid 20’s and his father, who I found out was 45.  Both men had long hair and a bit of a hippie vibe, but I wasn’t judging them by their appearances.  They seemed like nice people, and I found out that the son was an artist from Santa Cruz who moved here because this city has more of an artists community than Santa Cruz does.  (I knew we had some great galleries in this city, but I didn’t know it was such a hub of artistic talent).

Anyway, the father then proceeded to tell me that he used to do drugs (as evidenced from his lack of teeth – he has maybe 7 in his whole mouth) and had spent some time in jail.  Again, I believe that everyone makes mistakes and everyone deserves the benefit of the doubt.  I also learned that they were going to leave at midnight to pick up the younger guy’s girlfriend and her dog.

So, just in case you aren’t following this, that makes 3 adults and 2 dogs living next door in a 1-bedroom unit.  Definitely a sign of trouble.

The first couple of nights went fine.  They were quiet, friendly, and I thought that things might work out.  Thursday night painted a whole different picture.

Thursday night they decided to start drinking, playing the music incredibly loud (I had all my doors closed and could hear it clearly), and were hooting and hollering.  They were hanging out on the front steps, and the vibe was just really low class and trashy.  I know that makes me sound snobby, but so be it.  I work too hard for what I have and care too much about my home to live next to something like this.

So, I wrote a letter to the management company explaining what was going on, how unhappy I was, and why I wanted to change my lease from 1-year to month-to-month.  Lots of my co-workers are in the process of buying condos or smaller houses since the real estate market is down right now, and I started thinking, “maybe I can afford to buy something, too.”

I got an email the next day (Friday) from the management company explaining that they had talked the the neighbors and assuring me that they would cease and desist with the noise.  The thing is, the noise was only a small symptom of a greater problem.  The main thing is that these new neighbors simply don’t know any different – they’re used to living like this and I’m sure they see nothing wrong with the way they live or the noise they make.  The fact that so many of them are crammed into a 1-bedroom unit should be an indication.  Plus the fact that the son is the only one with a job.  Now, I know that the economy is tough right now, but they don’t strike me as the hard-working sort.

The neighbors obviously realized that I spoke to the management, and that fact was confirmed when I heard the father say, “wow, she pretended to be so sweet, but she’s actually a fucking bitch.”  Nice.  It’s going to be just wonderful living next door to this, right?

The more I thought about it, the more I realized that I’m at the place in my life where I want to live in an area where everyone cares about their home as much as I do.  My area isn’t like that.  My area is full of traffic, homeless people, and down-and-out sorts.  I’ve made huge improvements to this place, and I love my duplex, but if I’m honest, I don’t live in the best neighborhood.  By any means.  So maybe it’s time for me to move on to something better, somewhere nicer.

My mom always says that everything happens for a reason, and maybe the reason these people moved in was to show me that it’s time for me to look into buying a condo.  It would be a stretch, but I could probably afford something small.  I don’t have any money for a down payment, but there are new home buyer and teacher programs in my city that may make buying a place more affordable.  Plus, this is the time to buy because prices are down.

I pulled my credit score on Thursday and was happily surprised to discover that it’s gone from “poor” to “good” in the course of 3 months.  My Experian rating is 706, which isn’t stellar, but isn’t terrible, either.  I’m starting to get a bit hopeful that maybe I can join the ranks of homeowner.  So, I’ve contacted a real estate agent, and I’m waiting for his call.  I’m excited to see what might happen.

Things might be a bit uncomfortable for me at my current home, but with the idea that I may be moving onward and upward, I’m feeling positive.

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