So. I told you about deciding to buy a house, about the programs that were available to me, and about the initial searching process.
I left you hanging when I mentioned the $8000 tax credit.
That really was the ultimate deciding factor for me. If I could qualify, if I could use all these wonderful first time home buyer programs and receive the tax credit, I would be a fool not to try. But time was starting to run out for me.
As I said, I started this journey in the summer. It took a while to get approved, then to get my Realtor and I on the same page, then to start looking at houses. By October, I was starting to panic a little. You had to close on your house before the last day in November in order to qualify for the tax credit.
My Realtor and I were going out every weekend, looking at houses, trying to find something that fit. The way the HUD program works, you bid on the houses. Top bidder gets first option, next gets to be a second backup, then a third, so on and so forth. Should the top bidder bow out for whatever reason, the next one in line got a shot at the house. I needed to start bidding, which I did.
Not having a lot of money for a down payment, and planning to use the assistance programs anyway, I kept bidding low. My Realtor adjusted his fees with every bid, making them appear higher, but we kept losing. There were a lot of really nice, heart-breaking houses that I didn’t get because the bids were just too low. In some cases, people were bidding thousands of dollars above me – tens of thousands. Panic was definitely setting in.
I cut all my extra curricular spending down to nearly nothing, and started bidding higher than the asking price. This resulted in my ending up second on a lot of houses, which was an improvement over not even placing in the race. Eventually, the houses started to blur together. I took photos of everyone I saw, detailed photos, to help me remember them and also to show to my mom, who didn’t want to go house hunting with us or had to work.
The deadline for the $8k tax credit was looming when I got the call; one of my bids had been accepted.
From that point, I thought it would be so easy. I mean, the hard work was done, right?
Wrong. Pre-approval or pre-qualifying was great and it gives you a place to start, but after came the actual mortgage work; underwriting, approvals, paperwork – tons and tons of paperwork. We tried for an October 31st closing date, and it just wasn’t going to happen, so we shot for a mid-November date.
Most of that paperwork was on the shoulders of the mortgage and title people. What I had to do was different. First off, I needed to complete certain education programs in order to qualify for the first time buyer programs we were shooting for. This included online courses from CHFA (Colorado FHA) intended to teach me all about the homebuying process.
What they did, was frustrate me beyond belief. Here’s a synopsis: 5 areas, each one about a different aspect of the process. Within each area, you answer questions then, based on your answers, you move ahead in the program. They ask you twelve questions and give you multiple choice answers. You can choose exact answers, choose two answers that you aren’t sure of, or say ‘I don’t know’. Your choice dictates what you see when the test is over. And you have to do several rounds of questions per area, over and over, until you reach 90% accuracy in the subject matter.
It doesn’t sound like it, but it really is quite frustrating. It took me a long time to get through it all, but, in the end, I did and received a certificate of completion which I provided to my loan officer, ensuring that my closing costs were paid.
But there was more. For the 203k, I had to get a contractor and an inspection. The inspection to tell me what absolutely had to be done/fixed to get the house up to code, and a contractor to give me a quote on what all of that would cost. The inspection went okay – there were things that I knew of beforehand, so there weren’t very many surprises.
For example: I needed a new driveway (the existing driveway had sank), I needed a new front walkway (as the driveway sank, it took the walkway within, creating about a foot or more gap between the first step and the walk), the water heater had to be replaced (FHA requirement if the water heater has a date code more than ten years old), the deck railing was not to code (the space between posts was too far apart/city code said they needed to be narrower) and the attic fan was ‘inoperable’ (the inspector couldn’t tell if it just plain didn’t work, or if the controls just didn’t work).
Then there were the things I wanted done: I don’t like swamp coolers, so I wanted it replaced with an air conditioner, the kitchen cabinets were missing doors, had other doors that were mis-matched, some that were uneven compared to others, plus the counter tops were chipped and very old looking – so I wanted a new kitchen. Also, the stairs for the deck were sloped downward, the steps into the garage were unevenly spaced and there were no steps at all leading from the garage to the back yard, which was about a foot and a half drop.
I found a contractor who said he could do all the work for a decent price, and in two and a half weeks if there were no weather issues.
I submitted both inspection report and contractor bid, which were accepted.
Now all I needed to do was close.