Tuesday, January 12, 2010

A New Years Resolution

In general, I find (like so many people) that I often fall short of my New Year's Resolutions. Most years I don't make a specific resolution, I find I do much better with an on going goal list. I seem to do much better with a "goal list" as compared to a "New Year's Resolution list". This year it's going to be a bit different.

If you've been following my blog, you know I live in a very small house that needs a lot of work, work that I am just not capable of doing in a DIY fashion and work that costs big $$$. I've spent the better part of the past month taking a good long look at my house and making up a punch list of work that has to be done, work that should be done and the cosmetic work I'd like to do. The punch list is long and lengthy. So much so that it almost drove me to drink an entire bottle of wine because it depressed me sooo much. When I bought my little house, I honestly did not think I'd still be living in it, now almost 10 years later. I figured I'd sell it and move up, or rent it out and move to a new place. Ah yes, the grand plans one has. I underestimated the work that needed to be done and the cost of the work, and I overestimated my DIY skills.

I really would like for some DIY show to come and rescue me and my home, do the work, I can help, I'm actually a very good assistant and feature me on one of their programs. Hey I'd go public with my real identity if that were the case~can we say lovely small home done over in a "green" renovation. I think it would make a great HGTV show.
So after thinking about this long and hard, and doing some research my goal this year is to see if I can qualify for an FHA refinance/rehab loan. Based on the worksheets from a number of FHA lenders and the FHA itself, even with the Bankruptcy in my past, I may be able to qualify for a loan.

What I have going for me is the following. My house in not underwater based on the current market and where I live (thank goodness). My outstanding debt consists of my car loan and I'm in the home stretch on the last of my student loans (like it should be paid off by December of this year), my credit card does not carry a balance, I only use the card once or twice a month for gas or the odd purchase. I have not been late on any payments since I started the Bankruptcy filing and my mortgage has always been current.  What is not in my favor is the Bankruptcy discharge (now 2 years old!), my reduced income from my "full time job", and the fact it may be hard to find good current house comps on my small home. I will get a 1099 from the weekend job which may help to offset the reduction in income from the weekday job.

You may ask in astonishment, But Betty, why do you want to take on more debt? Simply, I want to be able to move to a house that is a bit bigger and in better shape than this one. In order for me to sell it and not take a massive hit, I do have some repairs that must be done. Even if I decide to stay in this house, it needs work. As I stated above, I don’t have the DIY skills for those necessary repairs. Houses, especially older ones, need repairs and maintenance. I’ll put up a post later about the list of repairs that I’ve come up with.

Part of the bouncing back from Bankruptcy was also to see if I can qualify for credit again without paying astronomical interest rates. I’m not overly thrilled with my car interest rate, but it was the price I had to pay to get a car so soon after the BK was discharged. I will let you know how the process goes. I plan on starting the process in earnest once I do my 2009 taxes, which will be the beginning of February and I’d love to hear your thoughts, good, bad and indifferent.


Anonymous said...

I think that you are doing this in a smart way. I had to declare bankruptcy several years ago and I have to say that taking out any sort of loan after that was always a stressful descion. Some of my family would wonder what in the heck I was doing going into a loan when my husband and I had had such problems with our finances in the first place. But we were one of the few that being bankrupt open our eyes to foolish spending habits and we learned from it all. It sounds like you have learned a ton and have been able to keep those lessons with you and move on in a healthy financial way. Good luck with your loan!

Shevy said...

The thing with home repairs is, if you don't do them things will eventually go from bad to worse and your home will lose value. You often have to prioritize (and re-prioritize when the unexpected happens) but you do have to take care of these things (even one little repair at a time), even if it means biting the bullet and taking on some more debt.

Revanche said...

This is pretty much why I've got such a mental block against buying real estate if everything's not perfect :P There's so much work and money involved!

Good luck with the loan!

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Everyone should have some kind of new years resolution.