Captain's Log

It's been a while since I've posted on our progress, and quite a bit has happened in the interim. In an attempt to catch up to current-day events, I'm going to gloss over the last month or so in Star Trek-like montage.

Last time on Star Trek Homebody: Captain's Personal Log, star date 051220.1. After months of looking at listings, Lindsay and I felt pretty confident that we knew what kind of house we wanted, and what neighborhoods we liked. Still, we decided to be open-minded about other possibilities, and we set out to look at a bunch of houses. They weren't what we wanted, most of them smelled bad, and it was a little discouraging. 

One week later, we were finally able to see a house that had been unavailable on our first tour of homes, and we liked it so much that we decided to put down an offer. It was an older bungalow on a quiet street in Gladstone, OR, and while it was in disrepair, it seemed like it would be perfect for us. Unfortunately, the day before we looked at the house, a Ferengi investor submitted their own offer. We were delegated to back up position, with little hope of ever owning the home. However, just when defeat seemed imminent, the investor backed out, leaving us in the first position. In a rare move of kindness and generosity, the investor provided us with the results of their inspection report. The house needed copious repairs to bring it up to the minimum standards required by our lender, and we couldn't afford it. We were forced to retreat to Starbase 22 (our apartment), more discouraged than ever.

In the ensuing weeks, we again convinced ourselves that we should be open-minded about homes that we hadn't yet considered. We knew that we loved older homes, that we preferred to be close to my work, and that we wanted to be in a charming neighborhood. Still, we thought that maybe if we compromised on the location, we might find something that was overwhelmingly good in other ways. In the end, the houses weren't what we wanted, most of them smelled bad, and they were far away from where we wanted to be.

We learned a valuable lesson for each day we spent out touring homes. For the first, we learned that we know what kind of house we like, and we don't want to compromise. For the second, we learned that we know what kind of neighborhood and location we like, and we don't want to compromise. With a mixture of both sorrow and relief, we finally realized that we would just have to sit and wait until a home came along that matched all of our criteria. 

Even though home prices are very low, and people are still struggling to sell, competition among buyers for less expensive houses has been fierce, which has made the inventory in our price range sparse. We felt as though we would need to prepare for a war of attrition, quietly saving money for months or years, waiting for the right house to come on the market so we could spring into action.

It took less than two weeks...

The Money

When my wife and I began to consider purchasing our first home, we made a close inspection of our financial situation to see what, if anything, we could afford. Our major concern was that I had zero credit history. Because of this, we were afraid that we would have to spend a few years building credit and saving money. 

While prudence and good sense would’ve stopped me at that point and said, “Oh dear, I suppose we’ll have to revisit this idea in a few years,” I refused to admit defeat. Instead, I hit the books (the eBooks, more accurately) and started looking for ways to make buying a home work for us. I literally spent weeks sitting around trying to find the perfect balance between closing cash and monthly payments, but no matter what I learned, it seemed that my unripe credit score was our biggest obstacle.

At that point, the quest stood upon the edge of a knife. If we strayed but a little, it would fail to the ruin of all, yet hope remained while company was true. I decided in a final desperate attempt, that I would venture through the Black Gate to my first Visa card. While I heard that one does not simply walk into a decent credit score after two months of building credit, I had destiny on my side. To my surprise, my score immediately shot up to a more than adequate number.

I suddenly saw a chain of events similar to the Rube Goldberg-like game, Mouse Trap, unfolding before me: if everything went as planned, the cheese would be mine. There are many lenders who participate in one or two of the first-time home buyer programs, but only a few who provide them all. My interest was in maximum flexibility, as I wasn’t sure which program would be best for us. Eventually I contacted both a lender from Homestreet Bank, and a lender from Umpqua Bank. 

While unconventional, I requested that both lenders answer my list of questions over email. I chose to communicate via email because it allowed me to formulate all of my questions fully, without having to worry about a hard sell or forgetting something important. I also wanted documented answers from each lender so I could compare their programs side-by-side. I stated all of these reasons openly in my email, but both lenders tried to call me right away instead (instant fail). However, within half an hour, I had an email from the Homestreet lender answering all of my questions, and providing a list of documents I would need to provide in order to continue the process. The lender from Umpqua did eventually reply to me, but her reply was simply to say that she’d be happy to answer my questions in-person, while completely ignoring the long, itemized list of questions that I had already sent her (double fail).

I called the lender from Homestreet right away and set up an appointment to discuss my options and submit paperwork. Within that same week, I met with her, and she told me that instead of the precarious Rube Goldberg device I had expected, my plan was actually a prudent, responsible means for financing my first home. She looked over my documents and told me that she’d contact me within a week to let me know how much we could qualify for. It ended up taking two weeks, but when we received the news it was very, very good.

I'll skip details about the exact numbers, but I'll definitely lay out our financial scheme. I've spoken with several friends and acquaintances about either their home buying plans or their recent purchases, and I wasn't surprised that none of them have heard of all of the programs that are out there for first time buyers. While the programs are readily available, I had to research an unseemly amount of difficult-to-read government websites in order to put all of it together.

The foundation of our loan rests on an alternative credit score compiled by the underwriting department of Homestreet bank. I know that I cleverly manipulated an allusion to Lord of the Rings  earlier in order to create a humorous exposition about my credit score; I made it seem like that number was the "One Ring" that made the whole loan process possible. And in a sense, it was. I wouldn't have felt comfortable going to the bank without it. However, it ended up being useless because my score was so new. Instead, I gave Homestreet the names and numbers of my employer, landlords, utility companies, and insurance companies, and they determined that I do indeed have a long-standing history of paying my bills on time, which meant that I was able to qualify for the rest of the loan products.

The body of the loan is a regular old FHA Loan. The Federal Housing Administration doesn't lend the money, they just insure the loan. With the FHA's insurance, only 3.5% of the purchase price is required as a down payment, rather than the 10-20% required in a conventional loan. While that puts a down payment more within our reach, there are other costs involved. Because the lender is only requiring 3.5% down payment, they charge an extra mortgage insurance on top of the monthly payment. This mortgage insurance is charged up until the home owner reaches about 20% equity, at which point it can be ended.

On top of the FHA Loan, we've been approved to take advantage of the Oregon Bond Rate Advantage Loan. In the Oregon Bond loan, the state steps in and issues a revenue bond to fund our mortgage at below-market interest rates. While I do understand what that means, when I try to explain it, all that comes from my mouth is a low groaning noise. What it means for our mortgage is that we get locked in at a 3.5% interest rate on a 30-year, fixed-rate loan. Tubular is an understatement. The catch is that should we desire to sell our home within the first seven years, we'd be required to pay back a portion of the investment, which has a parabolic percentage curve that peaks in the fifth year.

The frosting on the cake has been graciously donated by Clackamas County, through whose help we plan to receive $10,000 in assistance with our down payment and closing costs. The CHAP, or Clackamas Homebuyer Assistance Program as it's known to the acronym-adverse, requires that we attend an 8-hour first-time homebuyer seminar and an orientation class, after which we receive yet another shiny government product. It's really a second loan with 0% interest and no payments due, unless we sell the house in the first ten years. If we need to sell early, the loan is immediately due in full. After ten years, though, the debt is forgiven entirely.

None of the above products are meant for investors or people who want to move within a short period of time. The incentives and penalties are specifically designed to keep people in the same home for a decade or more, which suits Lindsay and I just fine. We'll keep the state and county happy with our commerce and taxes, and I really hope that we'll be able to integrate into our neighborhood and become functioning parts of our community. We're really aiming for a low, stable monthly mortgage payment that should stay within our means under most circumstances, and these products are designed to give us just that.

With our confidence in the power of good in Middle Earth restored, we even plucked up the courage to start talking to a real estate agent. We met with her over the weekend and now have a date next Friday to visit our favorite listings. This Saturday, we'll be attending our 8-hour class for CHAP, and we have the orientation next Wednesday. Just today we got our pre-approval letter, which means the underwriters at Homestreet have officially approved our loan, and all we have to do is go out there and buy something. From what seemed like a hopeless situation a couple of months ago, a tangible future has emerged, and we're so excited I think our heads might explode.

I'll be writing soon to reflect on our first outing with our real estate agent, and hopefully I'll have some pictures of the houses we visit.

Fears

Imagine this scene: The animated sun shines down on a vibrant cartoon world. Everything from the smallest blade of grass to the blue mountains in the distance wears a look of content as the entire world sways back and forth to the beat of an old dixieland tune. I step over the horizon and into the scene, whistling a counter melody and swinging my arms up to my chest in an exaggerated manner. I break into song, and cartoon flowers in my hand swoon at the sound of my rich baritone. As I stroll down the street, a particularly jolly house appears on the horizon, and before I get a chance to shout “Golly-gee shucks! What a ding-dang of a house!” a pair of happy bluebirds fly down and give me the keys. My wife and I move all of our gleefully swaying belongings inside, and the cartoon ends by zooming out from a riotous scene of the two of us attempting to consume thousands of pancakes.

You've probably noticed that I like to talk about dreams. While I understand that dreams are uplifting and motivating, I sometimes wonder if all of my work towards home ownership has been a bunch of cartoon-laced wishful thinking. Compared to the daydreaming that is inspired by browsing real estate listings, certain aspects of buying a home feel like a nightmare to me, especially dealing with real estate agents and lenders. While I never expected the process to be easy, I also didn't understand how frightening it would be to have the fate of my ideal future decided by the real estate industry.

For the uninitiated, just the sheer number of people claiming to be real estate agents is terribly intimidating. While a broad range of choices is probably better than just a few ill-suited ones, I don't understand how I'm supposed to make an intelligent choice when there are so many options. When it comes to what is probably one of the most important transactions I'll ever make, I want to make sure I have the best person to represent my interests (No, I didn't steal this line from a commercial).

My first choice would be to represent myself as my own agent, but I've done my homework and know that I don't have the expertise. I also know enough to not use the same agent as the seller of a house I'm interested in, and it's best not to use someone from the same agency either. I get that I'm supposed to audition people until I find the right person for our needs, then they're supposed to advocate for us until we get the house we want. I get how it all works, and it still bothers me.

I can explain this in several different ways that kind of scratch around the itch, but what really bothers me about this situation is that in order to get what I want, I might have to give up some of my control over the process, and potentially sacrifice my swaying cartoon flowers for reality. While some of that is to be expected, I'm afraid that I'll feel pressured into buying something I don't want. I think that most people feel like it's silly to worry about salespeople being manipulative because only really weak people give in to their Jedi mind tricks. I would definitely hope that I'd be strong enough to shop somewhere else if I wasn't happy, but I understand that good salespeople are successful for a reason. My mind isn't nearly as susceptible to Jedi powers as it is to its own desires, and so long as a salesperson can make me feel like their particular product will fulfill those desires, then I'm hooked.

Now go back and glance at my last two posts and realize the danger of my situation. So far, I've got a long list of vague but impassioned dreams, an undetermined amount of money to spend, and no precise timeline for when I expect to buy. All I know is that I'm not content in my apartment, that I want a house, and that I was ready to move yesterday. I don't know how a salesperson could resist such a ripe pick.

I'm also a little afraid that I'll get to a point in the process I wasn't prepared for and make a mistake. For example, I'm afraid of finding a house I really want, only to be told that I can't have a loan for it. While Lindsay and I have been saving and trying to build credit, we're probably going to be dependent on an FHA or state-subsidized loan. Those loans can be trickier to negotiate and have terms that may limit what we can do with our future property. What if I jump the gun and make a bunch of moves towards buying a house, and then find that I don't have the cash to back it up? I know how terrible it feels to have a checker ring up a hundred dollars worth of groceries at the store, only to realize that I've forgotten my wallet. Being in that position while buying a house would feel much worse. Pre-approval for a loan would definitely help in this particular context, but there are other ways in which I could sabotage the process.

I'm also worried about overestimating my renovation skills. I'm looking forward to working with Lindsay to craft the interior of our house to our liking, but we both have professional, social, and personal commitments that occupy our time. Could I channel Bob Vila well enough to replace the siding or the roof? I'm very detail-oriented and absorb new information easily, but I've never been very good at swinging a hammer. I feel like I could rise to the challenge. I'm absolutely absorbed in the subject matter, and I wouldn't have a problem spending all of my free time working on the house. I just don't know how much is too much at this point, and it could lead to an uncomfortable (or expensive) problem further down the road.

I think a simple way of summarizing all of these fears would be to say that I'm afraid of making choices without sufficient information. Considering the consequences of a mistake, I feel like I'm justified to be so cautious. Considering my goals, however, it's time for me to step into the unknown. I have no further recourse than to talk to a lender to assess where I stand financially.

A Dream

Am I an overly picky home buyer? On one hand, I can tell I'm going to like a house the moment I see it. On the other, what's considered damning for one house might be passable in a different context. While I do have some minimal standards, what I'm looking for in a home is its potential to facilitate our current and future needs, lifestyle, and hobbies. In short, I have a tendency to evaluate a property based on how well it suits my dreams.

I understand that once engaged in the actual home-buying process, I may have to compromise or even forgo certain fantasies in order to keep moving ahead. While I can see the wisdom in not pursuing perfection at the cost of something really good, I also firmly believe that the more I allow my dreams to influence my search, the more satisfaction I'll ultimately receive from the home I buy.

To find my house, you don't have to travel very far. It's not downtown, but it isn't in the country either. It's definitely far enough from any main street that you won't find a steady flow of traffic. It's even close enough to work for me to ride my bicycle if I like. You may notice a library, a small public park, or some small shops in the blocks approaching our street, but no mega-marts or chain restaurants.

The first thing you'll see when you turn onto our street is that the neighborhood is well-established, with old, but properly maintained homes on large lots with mature landscaping. Since it's Saturday, you're likely to see a few neighbors out pulling weeds, mowing their lawns, or just chatting with friends. Nobody lets their yard go fallow, and there's not likely to be any homes with yards covered over by concrete, random pools of bark dust, or statuettes of bears and seagulls.

You'll know you've found our house when you reach the lot that's a little bigger than all of the rest, and find the entire front yard tilled and planted for the year's garden. The peas, lettuce, and cabbage will be up already, and the late spring flowers around the perimeter will leave a mildly sweet scent on the breeze. You might think at first that no one's home, until you hear the sound of young voices laughing from behind the house. Taking the small path around the back, you'll wind through more blooming flowers until you come to a small chicken enclosure surrounded by apple trees. There you'll meet our children who are laughing because they had to climb an apple tree to escape a particularly cranky, yet loyal old hen.

Since you've never seen it before, and because they like you, the children will be overjoyed to give you a tour of the house. You'll be ushered in through the back door, which leads into a small utility room off the kitchen. The kitchen is completely full, from wall to wall, with perfectly organized jars, herbs, pots, pans, and rustic-looking tools. Combined with the thick smell of garlic and freshly-baked bread, the layout will suggest that the room is far more than a place to prepare food. It will present itself as the focal point for our family, where all of the projects from the outside world coalesce into a creative, wholesome home life.

After taking in the details from the kitchen, you'll start to notice a muffled, but distinctly-rhythmic sound. The children will read your perplexed face and know exactly what you're hearing, and drag you eagerly to a small staircase on the other side of the kitchen that leads down into the basement. Instead of finding the dark and dirty root seller with an unbalanced washing machine like you were expecting, our basement will be finished in a utilitarian, yet bright and welcoming way, drawing you down the hall towards the main room. Upon entering, you'll see me at the opposite side of the room, stooped over a MIDI keyboard like Erik from the Phantom of the Opera, entranced by what may potentially be the worst drum beat you've ever heard. Surrounding the exterior of the room will be a strange and grotesque assortment of instruments, electronic devices, speakers, and computers, all covered with a web of cables. Once you get my attention, I'll try to semi-apologetically introduce the room as my "home studio.”

After that, I'll take over tour duty from the children, and lead you back to the main floor to see the rest of the house. We'll stop again in the kitchen to check on dinner and pour a couple of drinks, and then move into the living room. It will be obvious at once that the focus of the room is on the wood stove, a well-loved rocking chair, and a weathered-looking upright piano. The room will have a lighthearted, rustic atmosphere, with homemade blankets, sewing, and art filling every nook and cranny.

While the children peel off to go back outside, we'll continue upstairs to the finished attic space which serves as Lindsay's office. From the windows on the second floor she can maintain her vigil over the children's outdoor adventures while working on her writing in a calm, bright atmosphere. Today she'll have all of the windows open to let the breeze in from the garden. While she'll be a little surprised that you've been here so long without her knowing, she'll happily show you in. Her space will be open and bright, with craft materials, yarn, and paper filling cupboards, drawers, and closets all around. You'll see right away the creative touch behind the beauty and brightness in the rest of the house.

As we head downstairs, the kitchen timer will start to chime, signaling that dinner is ready. While I start pulling out dishes for the children to set the table, Lindsay will lead you to the covered front porch, where we've set up a small table overlooking the garden. We'll settle in to enjoy a night of laughter and drinks in celebration of the blossoming of summer and the beauty of life. You might as well have another drink, as it'll be such a short journey home.

This fantasy conjures up strong emotions for me, and as I get new ideas, I create new story lines. For instance, Lindsay mentioned the idea of us having a bee colony someday, and now it's there, just beyond the apple trees, in a little meadow enclosed on the backside by a giant hedge of native Oregon blackberries. Not every dream will be possible, but each idea influences how I view real estate listings.

I've spent quite a bit of time considering what the perfect home would be like, but here's the thing: even if we found something that matched our fantasies exactly, we still wouldn't buy it. We don't want the perfect house to just happen to us; we want to create it for ourselves. We want to renovate the interior, till the fields, and plant the trees. By doing as much as we can ourselves, we add deep respect and meaning to the results. We write our own story lines around every effort we extend towards our future together, and each finished project becomes a memory of obstacles overcome in partnership and love.

So what we're really looking for is the potential to fulfill our dreams, which is a tall order for a wooden frame and a bit of dirt. Thankfully, we're resourceful enough to fill in the rest.

Pilot Episode

There must be people out there who are in the same boat as me. Just within the last two years I’ve graduated from college, started what I hope is going to be a long and prosperous career, and married my fiance of three years. From the chaos of my twenties, a stable, fulfilling life has emerged, and I find myself moving the scope of my vision from the immediate concerns of everyday life to the future my wife and I have already begun to build. Our sights are now set on personal growth, building lasting relationships, fostering a lifestyle consistent with our philosophies, and – most importantly – on raising a family. While we seem to be moving towards these goals in leaps and bounds, one shackle of our former life remains: apartment living.

While I am grateful for what our apartment has been, it no longer suits our growing needs. I can wax philosophical about the cramps on liberty that close-proximity housing produces. I can go on and on about the unsavory quality of our neighborhood and its tenants. I even have quite a bit to say about the impotence of not having actual ownership. To clarify all of that, though, I’ll just say that I’m driven by a dream of what I want life to be, and our two-bedroom townhouse, located just a half block away from one of the busiest streets in town, has exhausted its purpose.

Needless to say, (but still, I persist in saying it) I want a house. It feels like a selfish want, maybe even an extravagant want, and a fear constantly ticks at the back of my mind that it’s a want that is socially-conditioned and unnecessary. I’ve been hashing out these feelings of doubt for a while now, and for all of the arguments against private home ownership, I’ve compiled a single, well-articulated retort. To hear my retort, please stick your tongue out between your lips and blow as hard as you can. This concludes the interactive portion of this article.

When I first started thinking about home ownership, I thought it was just another far-off dream. As the dream gained momentum, I approached my dad with what I was thinking, and he encouraged me to research ways in which I could make home ownership possible. In the six months following, I absorbed every last detail that I could glean from the internet about buying and owning a home. I’ve made daily visits to listing sites, I’ve memorized more detail than I care to admit about financing options, and I’ve had my credit score checked at least twice. I’ve poured over crime maps, flood maps, seismic activity maps, school zones, voting districts, Google maps, population demographics, and nearby items of interest for hours trying to get a feel for neighborhoods and lot sizes. I’ve learned every last thing that This Old House can teach me about home repair and renovation.

My fear of being unprepared for a situation and making a fool of myself, or of being taken advantage of, deters me more than I’d really like to admit. The majority of the work I’ve done has been from the privacy of an internet browser (however private that is), and has not involved the input of others. To say it plainly, I’m afraid of walking into a bank and not being able to get a loan. I’m afraid of real estate agents and lending brokers using my intense dreams and desires to my disadvantage. I’m afraid of finding a house that I really want, only to be told that the renovations are too complicated or too costly for me to complete. In some ways, I guess I could sum it up by saying that I’ve been afraid to have my bubble burst.  In other ways, it’d be more accurate to say that because of the scale of the purchase, I’m being very cautious. Either way, I’d say that I’ve reached the limit of where the internet can take me in this, and I’m about to step off into the unknown abyss of real life.

I’ve made one small step already. I called a finance officer at a local bank and asked her to compute my loan-worthiness based on my current financial situation. She told me that I would need to build credit in order to secure the best interest rates, so my wife and I have opened a credit card account. We’ve also managed to start a savings plan to help with the down payment and other costs. While we have a bit more work to do, we’re much closer to the financial preparedness we’ll need in order to buy a home.

I’m starting this blog, then, to chronicle everything that remains to be done in the process. I’m not sure if that means just the buying process, or if it means renovation and repair, or if it just means everything having to do with home ownership from this point on in my life. I’ve seen the effects that a blog can have on a person from watching the evolution of my wife’s blog over the last two years. Because she pulls inspiration for her blog from our daily life, she ends up preserving in her posts many of our precious moments that would otherwise be lost. She has benefited in many other ways, which I am motivated by as well, but my real concern at this point is to preserve what has already been one of the most fascinating, yet arduous, projects I’ve ever set out to undertake. I am currently at the happiest, most stable point of my life, and it seems like a waste not to try and reflect on little bits of it here and there. If my wife’s experience with her blog is any indication, I’ll probably learn a tremendous amount through this process as well.

I think I’ve said more than a mouthful today, but I feel like I have a hundred more thoughts about home ownership tumbling around in my head. However, I'll reserve those thoughts for future posts.