Mikey D

I watch enough HGTV to know that home buying tends to be kind of a stressful time, but this is one hell of a ridiculous process with some ass-backwards rules.

To update, Grace and I are planning on making an offer on a home this coming Sunday. It is a 3 bedroom, 3 bath townhome, with a finished basement, walkout deck, and (this is my favorite part) is tucked away amongst the trees of the Patapsco State Park. Ah seclusion. It's the perfect place for someone like me who happens to hate the existence of other people. In all seriousness, it's a nice little place.

Now normally townhomes in this neighborhood tend to go for 300+. This one is listed at 250 for two reasons. One, it needs to be updated. The flooring needs to be replaced on all levels, and the kitchen needs a remodel. Also, the home is a short sale. A short sale is basically the step before foreclosure, as the current owners are unable to make the mortgage payments. The bank basically is trying to unload the home (usually for less than it's appraised value) just to get something for the property.

Which is where we step in. We are hoping to snatch up this home, do the remodels with some money we have saved and the new home buyer's credit (thank you government stimulus package) to make it look nice. Grace and I both like the idea of fixing up and remodeling a home to our tastes. Could be fun. Especially with the kitchen. I am totally going to take a sledgehammer to it, just like in all the home redecorating shows. Kev and Adam, you are more than welcome to join me on that one. That will be a good time.

Anyway, with a remodeled home in a nice area, we are hoping when it is time for us to sell that we recoup all of our money we put into it, as well as much more. If we can get into the home for 250 and sell for 300, that would be a nice little profit. And if the market improves, perhaps more. But that's five plus years down the road.

The most stressful thing about buying a home is getting the loan. Originally, going into this process, I figured this wouldn't be much of a problem. Silly naive me. Grace and I both sport credit scores 700+ and basically pay a mortgage payment as a rent payment currently, so it just made logical sense in my mind that we'd get pre-approved for something that would equate to what we're paying right now in rent.

Problem is, Grace and I both have large student loan debts. With Grace having to pay out of state tuition when she went to MSU and me finishing up grad school, our debt to income ratio is very skewed (and scary). This scares of a lot of lenders, especially when we are making car payments and the such on top of it all. So we are getting pre-approved for much less, despite the fact that we could make larger monthly payments.

So here's the solution we've come up with: Send Grace to school for her Masters. Yes, in order for us to get the ideal pre-approval from a lender, Grace will need to go to school for a Master's degree.

Why? Well when in school your student loans are deferred. If your student loans are deferred for a year or more, they do not count against you as debt. Why, I haven't a clue. So if Grace is back in school, and I am in school, well none of our student loan debt counts against us, which means our debt to income ratio goes from bad to great. This also means lenders will love us instead of hate us, and will give us a good loan amount with a nice interest rate.

This whole way to circumvent the system, however, is silly to me. Think about it. We have to become more in debt to get a better loan. Whatever.

Grace is very excited though. She is not the biggest fan of Enterprise anymore, and is looking to move up and out. I think she's more excited to go back to school and pursue her Masters than buy a house, haha. It's nice to see her so happy and excited. She's looking into starting Loyola's graduate accounting program this coming summer, after she takes her GMAT exam this March (she's all registered!).

So that's where we're at. Grace has a picture of the house on her blog (it's the last one). No sense in posting it again when she's already done it.

Okay, I'm done now.

~Mikey D