Skip to main content

Compromise, Open House and Student Loans


I never tire of writing how tedious, frustrating and emotionally draining the home buying process has been. In my home buying search, I have attended about a hundred open houses and viewings. Some I really liked (the new built in Bedstuy but was out of my price range), some were awful (the home that reeked of cat urine) and others fell somewhere in the middle. I've been seriously looking for a home for about a year. I can honestly say that I have seen it all. I had a pretty good sense of what I liked, what I could afford and what were deal breakers. By attending these open houses I was able to focus my search and I learned that there isn't a perfect home.I learned that term that is so often mentioned on Property Virgins and My First Place, compromise.
I thought It would be fun to share some of my open house pictures to show what you get for your money in New York. It's astounding to me that in Georgia you can buy a 3 to 4 bedroom home with a basement and large lot space for the same price as you pay for a tiny coop or condo in New York.
The first apartment is of a two bedroom coop that I seriously considered making an offer on.




I loved this apartment. It was quiet street yet was close to public transportation. It was on the 5th floor and had very good views of Brooklyn. There was lots of natural light. It had a security guard on site, laundry in the basement and a waiting list for parking. The kitchen and bathroom needed work but I was willing to compromise. The buyer was also eager to sell. The price was just right at $159,000. However, I couldn't move forward on it because my mortgage company (HSBC) didn't like the financials on this cooperative. It was not on their approved list of coops.
Here is another cooperative that needed renovation. 


 It was in the vicinity of Brooklyn College, close to transportation, on a quiet block, high ceilings, large space but needed updates in the bathroom and kitchen. There was a lot of interest on this place and I was one of six that arrived  for the open house with several others calling to inquire. The price was only $167,000. Perfect, right? Wrong. The downside to this property was the monthly maintenance was almost $900. My monthly coop fees would be more than my mortgage. Hence, I couldn't afford it.


I wrote about the issues surrounding my mortgage approval in my previous post but I would like to include an update. For the second week running my mortgage underwriter has been pestering me about my student loans. At this point they can deny me the mortgage because my debt to income ratio is possibly too high. I have three student loans with a current combined balance of $42,685.68. However one loan is subsidize meaning that the government pays the interest rate while I’m in school. The other two loans have a combined balance of $34,185.68 with an interest rate of 6.8%. Sallie Mae provided me with a letter with the expected date of  my graduation, 5/1/14 and the fact that I will receive a six month grace period and the date of repayment will be 12/1/14, However this has not satisfied the mortgage underwriter, who states that they need the exact repayment cost. Now here is where I've been doing my own math:
Though I’m not officially in repayment on my student loans, I started paying them last month and intent to continue to pay $400 per month going forward (for the next 17 months until repayment). As per my conversation with the Sallie Mae customer representative, I will be required to pay a repayment cost of $495 monthly for the next 10 years (once the loan goes into repayment). I did my own calculation of this on bankrate.com and the monthly payment was consistent with what was reported by Sallie Mae. My current balance is $42,685.68. However, $8500 of that is subsidized and is not currently accruing interest. The other two loans have a combined total of $34,185.68 with an interest rate of 6.8%.

Loan amount: $
Loan term:   years or   months Interest rate:   % per year Loan start date:  
Monthly Payments: $

Read more: http://www.bankrate.com/calculators/college-planning/loan-calculator.aspx#ixzz2XwjcaY00
Follow us: @Bankrate on Twitter | Bankrate on Facebook
I don't want my student loans to be the reason I lose this house.  What is it they say, all good things come to those who wait. and I have been patiently waiting for almost two months. If anyone has purchase a home with an debt to income ratio higher than 46% please leave a comment or email me. I would love to know how you were able to secure a mortgage.
Labels:

Comments

Post a Comment

Popular posts from this blog

I found another house

At the end of July, I thought that I had found my dream home. I made an offer. The seller countered. Then I accepted the seller’s counter offer.   I was already trying to schedule the home inspection when my realtor, Robert, texted me that the seller wanted to hold off. Well, according to Robert, the seller decided to sell the home to his neighbor’s friend. I was disappointed but then oddly felt relief. As much as I like the home and the area, I was a little worried that the location was a little too isolated. It was close to buses but far away from the train. I was concerned about how I would get to and from work. Robert would still make his commission as he was acting as both the buyer and seller’s agent. Everyone was happy except for me. I then called another former realtor, Louis, and we began looking at properties.   We went to an open house on a quiet street, a few blocks away from a subway station and a block from a bus, that was listed below market value. There w...
Post a Comment
Read more

Commitment Letter and Appraisal

Today, I got news that I've been waiting for for several months.  I finally got a mortgage commitment letter!  When I got the congratulatory email today there was this sense of I don't know, joy and sadness at the same time. I wanted to scream from the rooftop and then I wanted to cry. I'm excited but past experience has made me extremely cautious. I have always said that I don't want to focus on the negative but there is this part of me that is feeling uncertain and doubtful. A lot has happened over the last several months and it would be heartbreaking to get this far and have to be disappointed. On the other hand, it appears that everything is coming together. Yeah, finally some good news.  We have a tentative closing date of October 1, 2013. But before we get to closing I will need to be interviewed by the coop board. Thankfully I had completed my coop application package in June and the only missing document was the commitment letter, which I imm...
Post a Comment
Read more

We're in Contract

Last week we completed the home inspection. There were a few concerns such as a leaking faucet and fallen off cabinet doors but nothing that would impede us going forward with the deal. The house appeared to be in good working condition though it is in desperate need of deep cleaning.   My realtor has taken to calling this house a “hot property”, as there continues to be a lot of interest and offers. He was concerned that someone else could swoop in and make a higher offer than mine.   Apparently, there was a prior offer to mine and that deal fell apart after the inspection when the “greedy buyer” wanted to renegotiate the price.   I made my offer at the right time. Also, it was about $10,000 more than the prior offer. My realtor was eager for us to go to contract.   Present at the inspection were myself, my realtor, the inspection, the homeowner and the listing agent. I had asked my mom to come along as well for moral support. Mom did not see the home prior to...
Post a Comment
Read more