Tuesday, November 4, 2008

Wisdom Crashes the Party

So, looking for a house these past few weeks has really opened up my eyes to this whole mortage crisis. We went house hunting with an agent a couple weeks ago and 13 of the 14 houses we looked at were vacant. Pretty crazy. However, sitting in a mortage broker's office I can see why. We were approved for $20,000 over our budget. Kind of a lot of money.

We were pretty excited about finding a house. We found a couple that were really nice and that we could afford; I mean, they were within our $20,000 less than what the bank said we could afford. So, we made an offer. We had discussed with our realtor what would probably happen. We low-balled them, expecting a counter-offer. I was super excited; Matt was super queazy. The scenario played out as we expected, except the part where we counter-offered their counter-offer didn't go as planned. There was no counter-(counter?) offer from us.

Matt crunched the numbers again in our budget. Pretty much a chunk of our down payment was going to have to go to the ridiculously high (in a newbie's eyes anyway) closing costs and interest rates had just gone up. Basically, if we were to purchase this house for our original budget price, we'd be house poor.


I was not a happy girl (for various reasons which I need not get into :) ) and when all was said and done, our $20,000 under approved budget had dropped down to $45,000 less than what we were approved for. Thankfully, my husband is wiser than me (ok, I said it, let's not rub it in) when it comes to finances and chose to exam things further to keep us out of an ugly situation, but I can see how easy it can happen. There's so many other factors besides income and debt. When people lose sight of that and just see what they want, they find themselves in a pretty precarious situation.

So. we press on and keep searching. Though we just may have something in the works, partly due to a little help from Uncle Sam (funny how Republicans don't mind a little help from the government when it's in their best interest...ahem, ahem Matthew...) I'm not ready to get too excited yet though. I've already learned that lesson.


Anna said...

House-hunting is this insane combination of exciting and scary, the collision of dreamy eyes and the reality check of hard numbers! So true about the lender issue... so many people didn't know what they needed to know when they got "approved." I know somewhere down there in FL is the perfect gem of a house for you! Good luck!

Kstro said...

Definitely a stressful, but fun time :) Good luck!