#54 BankruptSEA
I’m not one to do things small. When 101 Things To Do Before You Die said to “make at least one huge purchase you can’t afford”, I went all the way. The stars must have aligned perfectly to make this happen. For about two years my realtor sent me automatic notifications of condos for sale in our area. Finally, the market took a nosedive and a listing for a waterfront condo for ONLY $120,000 caught my attention. The very next day our realtor called us to see what we’ve been up to for the past two years. I took this as a sign - a “SOLD” sign.
Before I knew it, we were putting in an offer. The owner countered our offer of $95,000 and $2,000 closing costs with $102,000 and $2,000 closing costs. There’s no doubt it’s a buyers market, so we countered again with $101,000 and $2,000 closing. Done! Now, we had to get the bank to buy off.
Our realtor recommended Countrywide Mortgage. Wait - didn’t they almost go under before Bank of America swooped in to pick up the pieces? Minor details. Anyway, the bank required us to put down 10%. No problem - I’d been saving for two years after all. The problems started rolling in when we tried to find Private Mortgage Insurance. FIVE companies said, “No!” - no second homes within 31 miles of the primary home, no condos in Florida, no condos at all, no, and no. Hmm, what to do?
Countrywide said we would need to put down at least $10,000 more to bypass Private Mortgage Insurance requirements. We had already maxed out a credit card buying furniture for the condo (not to mention a recent trip to the Bahamas) and emptied a CD to provide the initial $11,000. They wouldn’t let us take out a personal loan, because it would effect our credit (haha - too late now). They recommended I ask my parents to front the $10,000. I couldn’t back down - we had already gone this far. When the market picks back up we’ll have one heck of an investment, right? So I made the call of shame. My parents agreed as long as we could pay them back a few days after closing. What’s one more loan?
All’s well that ends well! We closed on the beautiful condo, got a loan at 0.99% interest to pay my parents back (way cheaper than Private Mortgage Insurance), and had our furniture delivered two days later.
For buyers without an obvious supply of endless funds, get ready to provide the bank with copies of recent pay stubs, past W-2 forms, proof of employment, proof of assets, print-outs of checking account activity, and your first born! Hey, times are tough.
Total Damage:
- 2nd Mortgage = ~$800 per month
- Homeowners Association Dues = ~$600 per quarter
- Additional Hazard Insurance = ~$300 per year
- Credit Card = $2,000
- Personal Loan to Repay Parents = $10,000
