The lot we wanted was taken!
When it came time to view lots, we fell in love with Lot 16. The thing about Lot 16…it was taken. It had been claimed for over a year. So we went home to think about it some more and view other options, and prayed. A few days later, when we went back to officially pick our lot, our sales rep said that Lot 16 is now available! The people who were going to build there ended up moving to another lot!
We Needed $1,000 to hold the lot.
Now that we picked out our lot, we had to put down a deposit. At first the deposit was for $2,500, but our sales rep wanted to really work with us, so he said that we can do it for $1,000. The problem…we didn’t have an extra $1,000 sitting around. He told us this on a Tuesday. We needed the $1,000 by Saturday. By Friday, God had sent new clients to Jason’s freelance business and we were able to have the $1,000 by Friday!
Two loan officers said they couldn't approve us.
We put down the $1,000 for the lot on Saturday. I felt nervous about the loan application process, so I had another loan company work at the same time as the original loan company. That Monday, both loan officers said that they couldn’t work with my loan situation because of my credit score and debt-to-income ratio. My faith was running thin, but my wife’s faith was extremely strong. She said that it will all work out, so I latched on to her faith, prayed and went to bed. The next day, the original loan officer said that she found a possible path to make this work! I didn’t even care about the details at that moment. All I was looking for was a way.
My credit score needed to improve 50 points.
When the loan officer pulled my credit in March, it was at a 570. We needed it to get to 620 in order to submit my application to the underwriter. She gave me a road map that involved paying down about $3,500 of my credit card debt. In the midst of looking at a detail version of my credit report, I noticed a discrepancy. Fixing that issue helped, but I didn’t have $3,500 laying around. However, that following month, in the midst of COVID season, President Trump approved a stimulus for individuals and families. Our family qualified for $4400 total and it came RIGHT on time. We were able to pay down the debt and raise my credit score not 50…not 60…not 70, but 85 points!
A lot of repairs with a little bit of money.
To get our house ready for the market, our realtor strongly suggested that we replace the carpet, paint the walls, fix torn drywall, fix siding, fix boards, and declutter. All I heard was $$$$$. We just attacked one thing at a time. When we did that, God caused clients to come through and make payments. As the extra money came in, we payed for each service. It was as if God was just depositing the money as we approached each repair.
The biggest repair price was the carpet. $4,700. We absolutely didn’t have it. We prayed, and got in contact with the CEO of a flooring company that our realtor knew. Since my realtor and the CEO of the flooring company had a good business relationship, he was able to give us grace and rolled the cost of the floor into the closing of the sale. All we had to do was pay 10% ($470) upfront. We did and they came through!
We needed to sell our house before June...for over asking price.
When we signed the contingency form on the new house in March, we had to at least be under contract by April 30. Between signing that form and our original deadline, COVID shut down the nation. Due to this unusual circumstance, and delays with repair companies, we were given grace to extend our deadline to May 31.
I originally wanted to sell our house for $265K because that was the magic number to help pay for the new house without struggling. But with our house being one of the few without a garage, and homes selling for under market value, it wasn’t looking good. My realtor was thinking maybe $255K. I wanted to be a bit more aggressive because I heard the market was great for sellers and our house would be the only one within a 3 mile radius on the market. So we decided to do $259,950 (because it looks prettier than $260K).
Two days on the market and we had two offers! The first offer wanted to go down to $255K plus $7K towards closing cost AND our washer/dryer. Instead of immediately turning it down, we contemplated and stalled a little. LaShona didn’t feel it at all, and the offer was about to expire. Right before it expired, the second offer came in…$265K ($5,050 above asking price aka my original target price) plus $0 towards closing AND we get to keep our washer/dryer! We ended going under contract by the 27th (well before the deadline).
Our movers bailed on us.
The buyers wanted to close quickly on the sale, and with them going over asking price, I was NOT complaining. lol. During the final week before closing, there was some miscommunication between the buyer’s agent and everyone else. Once we got clarity of the issue, it caused us to reschedule movers for the day after closing. We were scheduled to move out at 8am on Saturday. The buyers were scheduled to move in at noon. Very tight window. At 8:15am, Jason received an email (not a text or call) from the moving company saying that all of the workers called out sick. Now we were in a predicament. With no other moving company being able to help us, LaShona contacted people from the church, and in about 45 minutes, 8 people with trucks and trailers came to help us, and we were able to move EVERYTHING out by 11am. Truly a miracle!
Condition #1: Pay off over $9K of credit card debt.
We got approved for the new loan after the sale of our house! Approved with conditions. The first one was to pay off ALL of my credit card debt. It was over $9K. This would help with my debt-to-income ratio. Originally, I was nervous, but the sale of the house took care of that.
Condition #2: Get a pay raise.
Mind you…we’re still were still in the middle of a pandemic and people were losing jobs. Thankfully, our company was doing well during this time. I was relying heavily on the annual raise that upper-management receives, but COVID caused things to shift. The raises usually happened in March, but it was late June, and there still wasn’t a clear idea on if we were going to get the annual raise this year. First week of July, it was announced that instead of annual raises, we were going to receive bonuses instead. Normally that would be great, but for my loan situation, it wasn’t going to work because I didn’t have a record of receiving a bonus before. So I prayed, then took a bold step to ask my boss to see if they could convert the bonus to a raise. He went back and forth with the CFO, but eventually they were able to not only convert it to a raise, but still give me a bonus!
A better loan option you say?
This whole process was centered around a FHA loan. The interest rates this year are historically low, but having a PMI for the life of the loan isn’t ideal, plus the criteria is a little strict. Through it all, we got approved for an FHA loan with conditions. As soon as we met the conditions, the loan officer said that since it’s been a while since they pulled the credit score, and since then, we’ve paid off all the debt and sold our house, that could be enough to switch the FHA loan to a conventional loan!
UPDATE: Still was just a few points shy of making that conversion, however we were able to trim off about $2K in closing costs, due to a higher credit score and lower interest rate!
Locked In our interest rate!
We were able to lock in our interest rate at a 2.625%!
Big purchases, but can't touch our credit.
When you’re applying for a mortgage loan, your loan officer will tell you “DO NOT use any credit cards until AFTER you close.” Well, since we close in October and these Labor Day sales were staring us in the face, we needed to purchase a refrigerator and a living room set, since we let the new owners of our previous home have our fridge and we had to throw away our old couches, due to wear and tear.
When we bought our first home, we waited until after closing to charge up our credit card and purchase big items. This time around, I prayed that we wouldn’t have to struggle into our blessing and that we would not accumulate any more debt. At the beginning of our journey, I didn’t naturally see how it would be possible to afford closing costs. But NOW (Labor Day weekend), we had MORE THAN ENOUGH to purchase our fridge and couches in CASH, and STILL have more than enough to close!