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Posts Tagged ‘lending’

012503_real_home_loan-1Ok, 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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