“Oh, I meant to tell you what Jeff was telling me today about what a great time it is to buy a house,” Shannon said a few weeks ago. “He told me there is a tax rebate of $8000 for first-time buyers, and that interest rates are at an all-time low. He gave me the name of a friend of his who’s a mortgage broker, Jim. I think we should call him and see if we can get pre-qualified.”
For years we had toyed with the idea of trying to buy a house, but I had been skeptical that we could obtain financing due to my bankruptcy filing in 2005 and other aspects of our credit situation. But an $8000 tax rebate is a big carrot, big enough for me to push aside my doubt and agree to a meeting with Jim. The following week we were sitting across from Jim at his desk. He had run our credit reports, and scrutinized our pay stubs and bank statements.
“According to the numbers I’ve just punched in here, I can comfortably report that your income easily supports a $150,000 mortgage.”
Wait a minute! What? Rewind that a second.
“You mean to tell me,” I countered, “in spite of my bankruptcy and our debt ratio being what it is, you still think we would qualify for $150,000?”
“Well yes,” Jim confirmed. “Your bankruptcy was four years ago. Your credit ratings are well within FHA guidelines, and so is your debt ratio. Your monthly income easily supports the payments on $150,000 given today’s interest rates.”
“Are you surprised, honey?” Shannon asked me.
Indeed I was. Shocked and pleasantly surprised. Thus began the great house hunt of Spring 2009. Jim worked up good faith estimates for closing costs at several price points. We quickly realized that we could not afford a $150,000 mortgage. Lucky for us, Columbus is on the top-ten list of the best-value housing markets in the country. New construction and existing homes in decent shape are plentiful in the range between $100,000-125,000, our target price range.
Next stops: Realtor.com and Google.
—Michael