Sunday, September 19, 2010

First, we have to find a place to live

Editors note: This was originally written September 15th, 2010

Our current rental has been undergoing some issues recently, those are another story and not really my place to discuss... however, what it does mean is that we need to move.

After looking into buying the current rental we decided we would go out and start looking at other places. Now we are in Scotch Plains NJ, where the average 3 bedroom house runs around 400k. We need a 4 bedroom, and then some for our 3 boys, 3 dogs, and us... enter the repo market. With the economy going belly up there are more and more bank owned properties out there. In fact this month, there are more bank owned properties on the market than any time in history.

The benefits of getting a bank owned place are large, like getting a 4 bedroom house for 150k under market value, the minus are no one is living in the house, the bank doesn't know anything about the house, and they don't care. Its an as is, take it or leave it situation. Now if you have a ton of money that is fine, but we are going in with the minimum downpayment possible, 3.5%. However, a small downpayment means you hit FHA (The federal housing association) who are a little scared these days making them a little more inclined to be difficult when you are trying for a mortgage.

My real state agent is amazing, Robert Khors of Garden State Realty helped us find this rental, and being that we are newly moved from Canada, I turned to him when we decided we wanted to buy a place. He doesn't really do 203k mortgages, oh I didn't explain that did I?

203k mortgages come in two flavors, an expedited and regular. Expedited allows you to finance up to 35k of renovations in the house, and the mortgage company comes in and looks at the after improvement value to determine if the mortgage is acceptable. The process is daunting... and I'll talk more about it as we go through it. We found a place, and it was only on the market for 10 days when we put our offer in. We were the higher of several offers so we are in the process of closing out on it... which is a bizar parade of paperwork all during which if someone offers more money you could lose the place...