Mortgage pre-approval! (but the joke is on me)

In October of 2013, I began the long and arduous task of getting pre-approved for a home loan.  Three months later, I was turned down for various reasons on my credit report, but no one at that bank told my why. So I went to another bank, and it took the loan officer half an hour to ascertain the difficulties.  For some unknown reason, although the home loan for my farm had been marked “paid in full”, that bank had a note on my credit report that stated they had seized the property and sold it themselves to procure the funds to pay off the loan.  In other words, that would be considered “foreclosure” and I would not be eligible for a home loan for…alas, I do not recall exactly, but I believe it was 7 years.

Eventually, after many, many calls to various departments in that banking system, as no one could locate paperwork as I no longer had any account with that institution – many trips to a branch of theirs 25 miles away – weeks of waiting for the credit report to clear – the statement was removed.  I also had one back bill that had been sold to a collection agency.  Unfortunately, it had been sold again and it took weeks to locate the present holder and get that settled and removed from the records.  Weeks, frustration, tears, phone bills, gas, settlements, credit institution calls when items remained that should not have been posted there; finally it was done!   In late June of 2014, I was pre-approved for a home loan for the amount of $29,000.  (My income is just under $800 a month now on social security).  I had enough saved for closing costs and was set to go!

A couple of my friends and I were so hopeful, as we had been perusing the HUD site and realtor.com for weeks, and had found quite a few suitable properties at the amount I would be able to pay.  We had to watch for taxes and also look for homes with private septic and well to keep the bills down.  But we were very excited!  The search was on!

I had a few requirements – an acre so there would be room for the horse, preferably a private well and septic, and some sort of shed, barn or building.  I still do not know if Megan will be moving with me, but she is renting in the basement of someone’s home. She has Valentine, our dog and one of our cats with her.  I have our other 4 cats (all strays that we took in) and also our 3 chickens.  I need a place where she can come, for if anything happens where she is presently, she will have nowhere to go with the animals of ours that are with her.  I am not comfortable with getting a home where the animals could not go.  My dream, since our farm was lost in October of 2009 was to get us a new home.  To get us off people’s floors and couches, have a bedroom once again, a place where I can make my crafts, my herbal salves and preparations, cook,  plus a place to put my clothes and not have to keep them in the trunk of my car. 

At first there were a few.  I found a nice place with a very pretty double-wide, 2 acres, a big shed and some fencing.  It was listed at $31,000.  I put in an offer, sight unseen, for $29,000.  That property sold for $35,000 in 5 days. 

We found another, similar on a Friday evening.  I tried calling 4 different realtors over the weekend, and when I finally spoke to one late Monday morning,  I was told a contract had been signed that morning.

We also found several that were being sold by banks and not FHA HUD homes.  Nice places that needed a little work, such as fix a deck, paint rooms or put down carpets or tile, all of which I can do.  What I did NOT know and was soon to find out is that banks will no longer give loans on properties that need ANY work at all.  And banks will NOT put carpet in that one room with the subfloor.  Will NOT put in the required stove and will not allow a buyer to until it is purchased and after closing.  The other problem is that more and more of the low  priced HUD homes are listed as “uninsured”, which means FHA will not back the loan, so the home has to be purchased with cash.

So these properties are available ONLY to people who have cash or to investors.  One that I really loved and was listed at $25,000 was sold to an investor for $17,000.  Okay, the bank took a lot less, but no mortgage, no loan, off the books – easier for the bank.  But where does that leave low-income people who are desperate for a home? 

I cannot afford to rent.  Rents here where I am presently are $700 and up for an apartment,  $950 and up for a house.  I only get about $800 a month.  I could not even afford the rent without utilities, phone or internet.  Without food or water bill.  Even if I would move south of here to a depressed area where it is cheaper, I could not rent for $400 and pay utilities.  And there certainly is no place to rent with our animal family.

A home at the $29,000 I have been approved for would be about $230 a month, insurance and taxes included.  This is my only chance to get a place to live.  A house, a HOME.

I did put in an offer on a house about 3 1/2 hours from here and my children.  The house was a HUD home, needed some work, but there was an escrow amount which goes to the bank for repairs, and it was low enough that I could do it.  (For those who know something about mortgages, I have a 203b, not a 203k loan approval).  The house was listed with 1 1/2 acres and in an area I am somewhat familiar with.  I got a call from the realtor and my offer was accepted!  However there was a problem.  The land that was on the listing did not go with the house.  So there was approximately half an acre which was all trees but for the small front yard.  I was heart broken.

Months went by, searching frantically on every site I could find, day and night. I finally decided to try a different route.  I went to realtor.com and for each area put up the LOWEST price houses.  I needed one with a decent roof and good foundation, but many repairs I can do myself.  There were (are) a couple that  I really like, however, they are selling for anywhere from $14,000 to $20,000 and payment has to be cash.  My $5,000 that I have for down payment and closing costs is not nearly enough.

The other idea my friends and I discussed was someone purchasing one of these very low-priced homes for me, me giving them the $5000 I have, then making payments to them for a few years like a mortgage, all of which can be set up with just an attorney.  We found a few problems with this, as the home would not be their primary residence.  Taxes and insurance would be higher (which I could not afford), and they, too, would have to have cash for the remainder of the purchase price.  No bank would lend to them on one of the “fixer upper” homes, and any loan would add back  the price of closing costs.

8 months of looking, making offers, finding out a home doesn’t have a carpet in a room so it has to be a cash deal. 8 months of hopes dashed, frustration, despair and tears.  And still no home.  My loan is a joke.

The photo on this blog is of a home for sale last week.  Pretty nice on the inside with over an acre of land. A friend of mine found it and sent the link, but I was unable to get out due to the ice, snow and flooding here.  It is already under contract.WPpondview

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3 thoughts on “Mortgage pre-approval! (but the joke is on me)

  1. Oh no…..I can’t believe the house is already under contract….. 😦 I hope you will find something else soon! I also hope someone with the power will learn how ridicuoles these rules for the loans are….making it impossible for low income families to get back into a home….that is just not right! 😦

    I wish you the best of luck! 🙂

    Liked by 2 people

  2. The water is once again going over the bridge. My oldest daughter’s family took enough things to be out in the “real world” for a few days if necessary. I am in here on the ‘island’ alone, taking care of all our animals.

    I am not even going to LOOK at any home sale sites till I know I will be able to go see them or at least mail papers.
    ty for your good wishes

    Liked by 3 people

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