I'm so upset! Is this ever going to work for me? UPDATED POST 42

[brittneyscott]

: DH and I have been trying to build our credit and get in a position to be able to build a house. We were still looking at it being about a year away though. Then we ran across a pretty old farmhouse on 16 acres of land that would be perfect for us! I wasn't sure if it was in our price range though. It was at the high end of what I was willing to spend so I called a lender to see about getting preapproved before we tried to go see the house.

I told the lender the description of the house and the asking price and told him that we weren't expecting to buy anything yet so we could only get about 3-4000 in cash to do anything right now (or in the next couple of wks). He ran our credit and all and said that we were approved to go see the house. Okay now... he knows I ONLY have 3-4000 cash I can get before closing if we want it and he said it was approved go ahead.

We looked at the house and its great. It needs work and some remodeling but it is well worth the price and exactly what we are looking for. We called the lender today and said we would make an offer on it. He said to ask the buyer to pay 1/2 closing costs. No exact figures just 1/2. So (I've never done this before) I went to the re agent, tell her our offer and 1/2 closing costs. She wanted a figure, so I got the paperwork to bring home and take back tomorrow w/ the figure.

I called the lender back to get the figure and find out that we have to pay cash for the closing costs that we have to pay. Well I've already said that I would only have 3-4000 in cash and thats suppose to be a dp. I got the estimate on the closing costs and figured it a million ways. The best offer to make (more money for seller, less up front costs for us) would still leave us with 3-4000 in closing costs. I can do that if I don't have to do a dp but I can't get 7-8000 in the next 6-8 wks for closing! I'm going to call tomorrow to see if we have any other options. We have land (13 acres of timberland) that we would be willing to loan out for money for dp and closing costs or put up as collateral for dp. Lender says he can't do a loan on the land and then the mortgage even though that would leave us paying a much higher dp and still loaning out the same or less total that we were approved for.

I'm not sure what our options are now but I'm heartbroken b/c I thought I was okay to get it (surely he would've told me that we'd need cash for other stuff once I said this is ALL I have) and now I find out I don't have half the money. I know I can't make an offer if we don't have the money. I wouldn't do that but I'm afraid we'll miss out on this house. If we do it could take 2yrs or more to get a house built and the trailer we live in is falling down already. I'm so upset and I don't know what to do. I'm sorry. If you've read all this you're an angel. I just needed to vent and cry on a shoulder. : :

[mommaof3boz]

Do you qualify for any type of first time buyers? It might help with the dp and closing costs. What price of a home are you talking about, if you don't mind answering? If it appraises higher than you have to give you might be able to bury the closing costs in the equity. Also what about selling the timberland?? Or is that a money making type of thing?

[mamoma]

That is really disappointing, but it might be for the best right now. Maybe I'm missing something about your financial situation, but if I'm hearing you right and you only have three or four thousand dollars (not a slam - I'm in the same boat) you probably aren't in a place where it's at all a good idea to take on a house and sixteen acres. There will always be another house for sale, you know? It's better to wait until you're really ready than to jump on something when you know you aren't ready just because you fell in love. (Again, same boat - I fall in love with places all the time, but I've got no business even thinking about owning property yet).

[GoddessKristie]

Oh no! That's so dissapointing! We just closed today on our first home and during our hunt (6 months) we talked to a couple different lenders about our options, but it wasn't until we saw a mortgage broker that we really found a great deal. Ours is HUD approved so I knew he would know all the tricks of the trade and he got us a great loan that we have no PMI and a crazy low interest rate. I recomend you see a mortgage broker rather than going straight to a bank. Maybe they can work something out for you!

[kijip]

The markets right now in most places are slowing down. As an aside, you may be able to get the buyer to cover all or more of the closing costs.

Still the thing that jumped out at me is that you have $3000-4000 that would all be going into the house. How are you going to make those repairs/do the work you say it needs? Homeownership costs can add up. It not really prudent to jump into it without more of a cushion. And with the prices falling, you may get a much better deal in 1-2 years and have time to save more as a cushion.

[JessicaS]

Check on a FHA loan, or you can always try looking for another lender. Dh checked at lending tree just to see what we could get and we ended up using a lender from there and we got a very good non-adjusting interest rate.

[velochic]

To add to what others have said, although it sounds really disappointing, it also sounds like you are not in financial shape to be purchasing a home.

If you don't have a way to scrape together 3 or 4 thousand dollars within a few weeks for the home purchase, you don't want to be owning a large, fixer-upper on a lot of land. I don't say that to be mean, but to hopefully help you see the reality of homeownership. We just plunked down $5,000 for entry doors alone! Our guttering pulled away from the house during a bad rainstorm and the rain got into the door frame and warped it. Gotta be able to get into your house, so you have to make the repair. And then of course we had to repair the gutters. (Our house was built in 1939 btw.) Owning a home is not inexpensive!!

So, see, what I'm saying is that beyond not having enough for a down payment, you don't have enough to be homeowners, either. I remember in my early 20's being a single professional watching all of my friends go out and buy their first homes and feeling grumpy about it. But I waited a few years beyond what they did and buying a home was never a financial strain on me. Another place will come along that will be perfect for you. Just take your time and do it right so you don't lose the house in foreclosure after just getting into it. Good luck!!

[Kelly1216]

When we bought our house, we had the sellers pay the closing costs. It was written in our offer that they paid 100% of he closing costs. It was nice, we didn't have any cash on hand. Maybe, when making your offer, you could put something in there where they pay all or most of the closing costs.

[caeden&connersmom]

I was going to say the same, have the sellers pay the closing costs.

We bought our house and actually got back $5000.00 at closing, they call it a sellers assist. (That was used as the down payment) If that makes sense.

There is a program called American Dream Inititive that gives you the down payment as a grant. You dont pay it back if you stay in your home fo r a cetain amoutn of time. The people who bought our old house used it. There are guidelines you have to meet.

If you are able to make the mortgage and have steady income, you should be fine with the upkeep. Just pay as you go, you dont need a huge nestegg when you buy a house as long as you are aware of what may be needed in the future and are prepared for it. (The inspection will tell you a lot of what will need to be done)

[caeden&connersmom]

Also, if you go through FHA and the place needs something major, you can get a renovation mortgage that will give you money for the repairs in your mortgage. (If there is something that HAS to be fixed IMO, not to put in all new hardwood floors or something like that )

[blueridgewoman]

You can probably find a loan product that would roll the closing costs into the loan. Not the best idea, but if you HAD to, you could.

That said, I would wait. I always sort of cringe, to be honest, when I hear about first time homebuyers without much cash buying these old fixer uppers on lots of land. I've done it myself, so that's why.

[brittneyscott]

The problem with buying the house isn't the money long term. After the note and all our other bills (including the extras, dish, cells, etc.) we would still have plenty left over every month to put into the house. The problem is if we tried to get it we would be closing on it in a month 1/2 or 2 and we wouldn't have a lot more extra in that time other than what we have.

I'm just so upset b/c the house would be perfect for us. Its not just that I want this house but if we wait (we are until we have more money) I'm afraid it'll be gone. If we lose this one we probably won't be able to buy another and we'll have to build. Property doesn't go up for sale that often in the area were looking at. If we tried to build it would be ten times more headache and work, who knows what all would go wrong with that process, and it would take us at least a year before we could start building. That means it could be 2-3 yrs before we move if we don't get this house. The trailer isn't going to last that long. I'm constantly battling ants here, the porch is about to fall in, I've already fallen through the floor in the office and we spent hundreds to fix it, we've remodeled every rm except the kitchen so far. The kitchen is awful but we don't want to spend that much money on a rotting trailer. The counter has a dip in it, the floors are starting to warp, the tile is 30yrs old and stained horribly, a couple of cabinet doors are missing from water damage. Its awful and I'm so embarassed by it I never invite anyone over and I'm afraid to let my kids loose in their own home. I'm just so afraid this trailer is going to collapse on our heads before we can get a house. :

[brittneyscott]

Sorry I got distracted in that post. The 'lender' I mentioned is a mortgage broker. He is going by an FHA loan. We're waiting right now to find out if we can cut our trees. Its landlocked and our easement in will allow us through but won't allow the loggers in b/c he's a . I've already talked to my atty. about it. We've tried to work w/ the guy about us fixing the road afterwards if there are any damages. He wants $5000 to let us in. Even our atty. said it was ridiculous. I told the atty. that I'd be willing to pay him something to use the property if thats what he wants but I won't pay to fix the road afterwards too w/out knowing how much all of it will cost. Its one or the other, the money for access or fix the road. The guy won't even talk to our atty. to work something out.

Our logger is trying to find us access through someone else to our property. He called this week and thinks he found a way in. He said he'll know this wkend if they're going to let us through and if they do he can start on them next wk but we don't want to hope too much for this considering the issues we've had with it before. If that does happen, then we can go ahead and get the house but I just don't know if it will. I don't know what to do. We really NEED a new house.

[blueridgewoman]

Do you have a formal easement agreement or is it grandfathered?

The thing about our easement (we're landlocked too) is that the other homeowner absolutely cannot disallow access to our property, by us or anyone. He CAN disallow people parking on the easement or anything that would mean things, vehicles, or people would be staying on the easement and not just traveling through, but he cannot just say that certain people can or cannot use the easement. As long as the loggers are not parking on the easement or anything and are just using it to get in and out, I don't see where your neighbor has a case.

I would consult your attorney and another real estate attorney to be sure. That doesn't sound right to me at all. I would also ask the attorney what would happen if the loggers showed up and drove through one day-- what would your neighbor do? What could he do, legally? Because if the answer is nothing, sometimes you just sort of have to force your hand with these sorts of issues, honestly. Politeness can get you far, but sometimes just not giving someone prior notice for something that really isn't within their purview to decline can get you farther.

[Knittin' in the Shade]

Originally Posted by brittneyscott

The problem with buying the house isn't the money long term. After the note and all our other bills (including the extras, dish, cells, etc.) we would still have plenty left over every month to put into the house. The problem is if we tried to get it we would be closing on it in a month 1/2 or 2 and we wouldn't have a lot more extra in that time other than what we have.

I think that you missing the point of what the others are saying. You may have plenty left over each month for incidentals, but what about the BIG problems that come up (like a plumbing leak that means new pipes need to be installed for $3K, or a $20K new roof because the shingles are coming off, or $2k for a new heating system because the ancient furnace went kaput on the coldest night of the winter?) If you've only got the ability to scrap together 3-4K in the next two months, that signifies that you do not have an emergency house fund at the ready. Which means that any of those big emergencies will wind up on credit cards. Which means that the "plenty left over" will quickly get eaten up by high interest rates.

I

'm just so upset b/c the house would be perfect for us.

You need to look at this with a prudent view and not an emotional one. You cannot let your financial decisions be guided by feelings about the "perfect house." It is not a perfect house if it's going to put you into a financial pit.

[blueridgewoman]

Oh, and no WAY should your attorney offer this person money. I hope, too, that you're working with a real estate attorney and not just a random one-- if not, please find one who specializes in real estate law. Chances are, you'll need one for the closing anyway, so you may as well track one down now. I would imagine that any good real estate attorney would know right off the top of his or her head whether this whole easement thing was even worth your effort worrying about it.

Which I seriously don't think it is. I mean really, this is like your neighbor refusing to let the power guy come read your meter, or letting your friend come by for dinner. I'm about 99% sure he has no standing. If it were me, I'd tell the logger to just go, but that's me.

[brittneyscott]

Well I talked to the atty. about the loggers and the easement and legally the guy doesn't have to allow it b/c it could mess up his road and we'd have to pay to fix it. The guy doesn't want to work out anything though. The logger thinks he's found someone that will let us in so *fingers crossed*.

I talked to the broker again and I didn't understand the paperwork that he sent me. He had it set up where our down payment and closing costs were all included into the loan and all we would have to pay afterwards would be a small amount. Possibly only a few hundred dollars but definitely no more than 3-4000 that we have. So I hope that maybe we can do something to get this house.

[nd_deadhead]

I feel your pain! It is so frustrating to fall in love with a house, then find out you might not be able to get it!

I do, however, understand what the others are saying. Remember, it's not just the mortgage you have to budget for as a monthly expense - there's insurance and property taxes, which will probably be alot more than you're paying now. An old house is going to cost a lot to heat. Things can go wrong that you haven't even thought about. Wiping out your savings to make this purchase could put you in serious trouble later on. Added expenses of homeownership might mean that you can't rebuild the savings as quickly as you expected. While it might hurt now to lose the house, it would hurt a lot more to lose it in 3 years because you can't afford the house AND the repairs.

How long has the house been on the market?

I also understand your concerns about your trailer.

I wish you the best! Let us know how it works out for you.

[Selesai]

Originally Posted by brittneyscott

The problem with buying the house isn't the money long term. After the note and all our other bills (including the extras, dish, cells, etc.) we would still have plenty left over every month to put into the house. The problem is if we tried to get it we would be closing on it in a month 1/2 or 2 and we wouldn't have a lot more extra in that time other than what we have.

I understand your situation because I am in the same one. I have the income and monthly cushion for a house, but not the savings or the emergency fund. DH and I have decided to rent for at least a year and save the rest of our money. By that time I hope to have some for a moderate downpayment (FHA 3% maybe) and a chunk of change for savings for those what ifs.

How do i deal with this? I don't look at houses. Seriously. There will always be another house. I really believe that to be true. So if you can't buy, or it isn't prudent to buy, then don't bother looking (beyond maybe knowing the rudiments of the market-- can be done online). You'll just drive yourself crazy. When you are ready to buy, you will find what you need. It's not useful to think over the "what-ifs" about having to build, etc. Take it one step at a time.

You sound like your current living situation is pretty bad. Can you rent something else until you can buy?

Originally Posted by Knittin' in the Shade

I think that you missing the point of what the others are saying. You may have plenty left over each month for incidentals, but what about the BIG problems that come up (like a plumbing leak that means new pipes need to be installed for $3K, or a $20K new roof because the shingles are coming off, or $2k for a new heating system because the ancient furnace went kaput on the coldest night of the winter?) If you've only got the ability to scrap together 3-4K in the next two months, that signifies that you do not have an emergency house fund at the ready. Which means that any of those big emergencies will wind up on credit cards. Which means that the "plenty left over" will quickly get eaten up by high interest rates.

You need to look at this with a prudent view and not an emotional one. You cannot let your financial decisions be guided by feelings about the "perfect house." It is not a perfect house if it's going to put you into a financial pit.

: Great advice, Knittin'. Homeownership can become so emotional, and it's hard not to let that emotion interfere with the financially responsible thing to do. It's not fashionable to be responsible, but it sure does feel good and secure.

[Upside]

Originally Posted by nd_deadhead

Remember, it's not just the mortgage you have to budget for as a monthly expense - there's insurance and property taxes, which will probably be alot more than you're paying now.

Escrow is a mandatory part of our FHA mortgage loan. I would be surprised if if insurance and property taxes weren't already figured into the mortgage payment. I'm going to go against the grain here and support your decision to buy. We bought our house with a small down payment and no emergency funds and have been here for five + years and never had a month where we were worried about making our bills. Though, when we bought, the place had a newer roof and furnace and was ready to live in. We've replaced the water heater, tiled the floor, built a shed, painted a lot, replaced appliances, but nothing huge...

If the house is in living condition and the inspector clears you on the roof and termites and that sort of thing, well we could all wait forever to be at the "right place" before we buy, or have kids, or whatever. Before you know it years have gone by and you still don't have more than 3 or 4K because you had a health issue or your car died or someone slipped on your sidewalk and sued you. It's a fact of life that not everyone is going to move up the corporate ladder or make more money down the road and to wait for that day may lead to a lot of disappointment. Don't be reckless, but do live your life, yk? That was way more than 2 cents, I know .