I don't even know where I left off in the story. I'm too tired to reread and relive it, so I'll just summarize. Late last night, we heard that we wouldn't be able to get a traditional loan. That was AFTER we were told we had 24 hours to get our final offer together for the house. Another offer came in at the same time, and rather than have counteroffers and a bidding war, the seller wanted to just look over both offers and pick the best one. So, while scrambling to figure out how we'd come up with the money, I was also working on personal stuff -- the realtor suggested we write a personal story to share with the owner, along with a picture, so that she'd like us and want to sell to us. I'm kind of a perfectionist when it comes to biography. I spend more time deciding what I'll put in my one-sentence by-line on freelance contributions than I do on entire articles. So I worked hard on that, while also pleading my case to my parents. I wrote a very detailed email to them spelling out why we think it's the right place for us, a good deal, our budget, our plans, everything even remotely relevant to the situation. I knew my dad would get home at 3:30 eastern, so from 12:30 on, I was anxious as hell. I could barely stand it. At 2:30, I couldn't wait anymore. I called home. Mom answered. She had just returned from bridge to find Dad asleep on the couch. No, he hadn't looked at my email. Sigh. She printed it off and woke him up to talk it over. He called me a few minutes later.
One thing that's been particularly difficult about all of this is that I feel like there's been a lot of jerking of emotions. At first, I didn't think we could afford a house now, so I wasn't even serious about looking. Then Z convinced me that we should look now. Great! Excitement! We talked to a lender, and he called us a sure thing. Great! Then the first zillion houses we saw were huge letdowns. The few that we loved turned out to have horrible flaws...constant flooding, 17 other offers, $600 monthly HOA fees...yeah. And I was ready to give up again. And then one more look, and we found what we wanted! And we put an offer in! And it had been on the market for so long, we were sure it'd be ours...but no, there's another offer...and wait, you can't get a loan! And then my mom was so encouraging over the last 24 hours that I really felt like my parents would come on board with the whole thing. They did finance whole loans for each of my brothers. So I was not prepared for the anger on the other end of the line when my dad called me.
He wasn't mad at me, but when he's mad, rage takes over, and it's really draining, even when you know he's on your side. (I used to be like this. Being on the other end of that, now medicated and healthy, is horrifying. I'm sorry to everyone ever.) Anyway, I kept repeating that I agreed with him that it's bullshit that lenders won't give us a loan even when we're putting enough down that it's absolutely no risk to them (when we put 30% down, even if we defaulted, the bank would have no trouble recovering the principal, even if the house sits on the market for months or years). But the fact is, the mortgage crisis tightened the rules. My dad wouldn't hear it. To him, there's a logical argument in our favor, and anyone who won't hear it is an idiot not worth dealing with. Okay, yeah, I kind of agree...but unfortunately these are the rules across the board. It's just the way it is now. So I told him that I think the only way we'll be able to buy anything now is if they finance my entire loan. He said no. That would tie up all of his cash, and he's not going to do that. I understand. I was disappointed, but I ended the conversation with a thank you and maintained my cool until I hung up, at which point tears burst through and didn't stop flowing for hours. I was at work at the time, too. Awesome.
After I got off the phone with Dad, I called the lender we'd been working with and just asked him to explain the situation. Will HE not approve us, or will NO ONE? I mean, he called us a sure thing! But the issue is that banks are (rightfully) so much more gunshy than they were last time I bought a home. Stated income loans don't exist anymore. You have to prove you have the income to cover payments (not just assets -- for some reason, banks require INCOME), and having been self-employed for the last 5 years (me) and 16 years (Z), we had so many writeoffs and deductions that our tax returns indicate basically zero income. And now that we're in new jobs, we're not established enough for lenders to take us seriously. Never mind that my credit is perfect and I already own one property and we have no bad debt...basically the lender told us that there's no way we're getting approved for a loan. I'll need to become salaried rather than hourly in order for my income to be considered, and even then, the best he could do for us with our current income would be about a $70K loan. I guess we're just way better with our money than most people at our income level, because our budget has room for a loan four times that amount. Not that we're going that high...but we COULD afford it. But banks don't believe that. And I understand. They've been burned. The lender said they really don't make exceptions for people who make huge down payments, either. So few people do, and banks just won't take the time to have a different set of qualifications. It's all hard and fast based on income and you either qualify or you don't. He said "I'm sorry, but you're not going to qualify anywhere."
I called my mom and explained this to her. I explained that I understand Dad isn't mad at me, but that talking to him was so draining, I was just over it. I didn't have the energy to work on it anymore. I gave up. I was crying, but trying not to play it up for sympathy. I could tell my mom felt terrible. She WAS on board and wanted to make it work for us. She made some calls of her own to bankers. They told her the same thing. She relayed it to Dad. I talked to Z and told him I guess we give up for now. We just need to save up enough that we can pay cash if we're going to buy a place. Give it a few years. I was defeated, deflated, and done. Out of energy to devote to this. He was too.
Then I got an email from Mom. She had talked to Dad about what the bankers and I had told her, and she said he got it. She said "He thought they were just shysters [sic, lol] but now he realizes that's how it is." She said they really wanted to help us make this happen. I said, well, you were willing to give me $50K. I have $90K in stocks, of which I owe Dad $56K (he paid cash for my first house down payment and for my old car, with the understanding that I'd pay him out of this stock. He just never took that money out.) After that 56K, we have 34K, so we could use our own 34K for a down payment, the other 56K + 50K you're willing to lend in cash and essentially take a 106K loan from you, while only taking 50K of your cash reserves.
She ran that idea by my dad while I was on the phone, and he displayed a kind of remarkable amount of enthusiasm for the notion.
So, it's a go.
The deadline for our offer was 5pm, and I got all the loose ends tied up with my realtor at 4:45.
The selling agent presented our offer at 7pm. Our realtor says that we should know by tomorrow morning at the latest, but hopefully tonight. She'll let us know as soon as she hears anything.
As it stands right now, our offer looks like this:
They are asking $134,900 for the house (down from 170K, other condos in the complex with the same plan are currently listed at 155K and 200K). Our original offer was full price minus closing costs up to 7K. We improved our offer to 137,900 minus closing costs, but since my parents won't charge us closing costs, there will only be about 2K of costs. We're cashing out 90K in stocks, and parents are giving us 50K in cash, so we have 140K. So we're making a cash offer. Pretty attractive, right? I'll be shocked if this doesn't get accepted, but at this point, I'm completely over optimism. Heh. We'll have a 106K mortgage with my parents. The closing date we proposed is August 13. They also have a lovely essay about us and two super cute photographs. Fingers crossed...
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