The Bertou family buys a house: Part 6

Part 1, Part 2, Part 3, Part 4, Part 5

It’s been a while since the last update on this. That’s because there have been some things we’ve been waiting to hear on/figure out before we knew what our next steps should be. Let me give you the run-down. (Warning: This could get lengthy.)

We applied for a mortgage through our bank, and on their end everything looked fine. But we hit a snag when it came time for them to submit the application to their PMI company. Because of the current mortgage crisis, the PMI company recently raised their standards – effective June 1st. Even though we applied on June 10th, the PMI company did not notify anyone at the bank that they were changing their policies or else we would have caught it then. Basically what happened is, because we are receiving so much grant money, and so little of our own cash is going into this transaction, the PMI company wouldn’t insure the loan. Smart for them, sucks for us.

In short, this meant we had to start the mortgage application process all over again with a different type of mortgage. It’s a New York State mortgage program called SONYMA (pronounced “Sunny May”). We fall well within all of their parameters and should be able to secure the mortgage without any issues – as far as anyone can tell right now anyway.

There have been two significant consequences of all this.

First, the “buy down” grant that we qualified for is not available on a SONYMA loan. So our interest rate will go up from an unfathomable 4.5% to a still-pretty-darn-good 5.1%. Meaning, the house will cost us a bit more in the long-run, but we’re still getting a pretty good rate.

Second, and probably most significantly, we lost three weeks. Since we told our landlord that we are buying a house and expected to close sometime in August, he has hired a realtor to begin showing the house to potential tenants. Long story short, we’re most likely going to have to be out of our place by August 31st. But the new tentative closing date is “sometime in September.” So we have some best/worst case scenarios to prepare for.

Best case scenario – the one we’re praying really hard for while crossing our fingers, wishing upon a star and eating boxes and boxes of Lucky Charms – is that the miraculous happens, this mortgage goes through fast and we still manage to (somehow) close by the end of August.

Second worst case scenario is that we’ll have to move all of our stuff into storage for a couple of weeks while we take refuge in someone’s guest room and wait for the closing. This would kind of suck because we’d have to move our stuff twice. Not to mention living like a vagabond with a five-year-old and a newborn is sure to get on some nerves. Oh, and don’t forget our roommate. We had a college student live with us last year who is planning to move into the new house with us until she’s done with school. This would no doubt be a bit tumultuous for her as well.

The worst case scenario is that we don’t get this mortgage, we have to figure out some other way to secure one and we’re homeless indefinitely with all our stuff in storage until we figure something out. But we’re not thinking about that right now, every time I do I start convincing myself that cyanide is a key ingredient to Kool-Aid. 😆

So there you have it. Hooray!

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5 thoughts on “The Bertou family buys a house: Part 6

  1. Well wouldn’t that be coming full circle. 🙂 Hopefully it doesn’t come to that but thanks for offering just in case.

  2. If your worst case scenario rings true you can always ask to take prepossession of the home. Sometimes you have to pay the “owner” a per day fee to “rent” the dwelling. Other times the just let you move in. You usually would have to have some form of liability insurance in place like your current renters insurance or some attorneys want the home policy in play at that point. I have a client who just wet through this and they paid like $10.00 a day to the seller for them to take prepossession.

  3. Thanks Katie. We are aware of this and you never know, it could be something we ask about. I do believe this came up in our meetings with the city and Cheryl seems to recall them saying that it wasn’t a possibility. Something kooky with the fact that the City is the owner, etc.

    But I’m not 100% on that, Cheryl is way better on details like that. I just hear the teacher from the Peanuts cartoons whenever anyone talks to me about this stuff!

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