House Hunting

So my wife and I put in an offer on a house about three weeks to a month ago. The house was in a pre foreclosure, so the seller was already selling it at a loss. Once she okayed our offer, we had to hear from her lender if they were going to accept the offer, or opt for the foreclosure option. It was an interesting situation considering this is our first time buying a house. 

Well today, we finally heard from the lender. They have accepted our offer and, pending inspection and VA approval my wife and I can take ownership of our first real house. This is an amazing time to buy a home if you are planning to stay in it long term. We have gotten an amazingly low 30 year fixed rate loan... 5.5%. Who says the lending crisis is bad for everyone?

Jonah and I have been able to take advantage of the bad decisions of both lenders who gave out bad loans, and buyers who got in over their heads... While I have mixed feelings about this, overall I think that I will be able to sleep at night. After all, personal responsibility is a virtue that needs to be reenforced in our country today. I really hope those that have made these bad deals have learned a lesson in personal responsibility. 

I know that I did. When we bought our condo in Hawaii we made some pretty poor decisions when it came to the loans. It was not helped that the lender we went through was more interested in their commission than in our what we could really handle. I gave in, and went against my better judgement. Instead of exercising my VA benefit then, I went for the low payments of an interest only and an ARM... About 6 months later, I finally realized that I really was seeing the writing on the wall... we were in a bad situation...

I knew that my wife and I were in a situation where if the ARM went up we would be homeless in six months... not a good situation to be in... I explored my options and decided to take advantage of the hot market in Hawaii.. we sold our condo for more than we bought it for, right as the market peaked. We paid off all our debt, and that included the $2500 and $5000 prepayment penalties on the bad loans we had... I guess we were lucky...

We were also realistic though. Once our bright eyed optimism wore off, and reality sunk in, we knew we had made some bad choices. We could have stayed in the situation and waited for someone to bail us out, or lose our home... Instead we decided to be a little responsible... We still did not end up in the ideal situation (my parent's basement), but that has proven to be temporary... We learned our lesson.

What is really funny is even though I am a student, work at a Church and we have less than $50K annual combined income, the lending industry would still give us $235,000 if we wanted it. We could get a nice home here in Colorado for that price, but we couldn't afford it. That is an important distinction to make... what you can afford and what you want... they are not always the same thing. What we can afford is something we should all learn to realistically assess...

Prayers,

Pisio