Money: Part II

Well, it took a bit of work, but we were able to squeeze in the loan and the contract signing all in one week. The trick was getting all of the money from the credit union to a checking account in five business days so that we could pay for the first part of the addition before beach week. That way, our contractor could work on getting the permits while we were enjoying ourselves on the beach. The money was not actually in Colleen’s account by Friday morning, but it did arrive by Friday afternoon (so technically there may have been an hour or two where Colleen had a $50,000 check written that she couldn’t actually cover, but we won’t dwell on that). Anyway, contract was signed, money was handed over, there’s no turning back now!

The Circle of Life

Eventually all the leg work was done on the loan and it was time for the ceremonial signing of the papers. Actually, there isn’t really any ceremony at all. For a process that takes two hours and grants you “the American Dream,” all you really walk out with is a stack of papers, a hand cramp, and a silly smile on your face. Fortunately, a little twist of fate gave the process a bit more feeling. The little board room where Paul, Rhema, Colleen, and I sat around a table to give Colleen and I our first house was only a few hundred feet from where Paul went to grade school and only a few blocks from Paul and Rhema’s first house together.

Money is the root of all . . .

. . . additions. In case you haven’t heard, the banks are getting a bit pickier about to whom they lend. For that reason, we didn’t get our loan from a bank, we got it from a credit union. Other than the spelling, I’m not entirely sure what the difference is, but I do know that they gave us a pretty good rate. Unfortunately, since we were refinancing with a different bank than the original, they needed a new appraisal. We figured, “Big deal, the tax assessment is $150,000 more than we need for the refi, what could go wrong?” This is what can go wrong: They send out an appraiser who is two months out of junior college and you get under appraised. This caused our loan to be more than 80% of the value of the house which ended up costing us about $2,000 in points. It's kind of a tough conversation to have with your loan officer:

Loan Officer: "We need 2,000 more dollars"
Us: "So, just so I understand the situation: Your appraiser, who we paid $600, grossly under appraised our house, and now we owe you an additional $2000?"
LO: "Yes"
Us: "Oh, I see now, that seems fair. Do we at least get a better rate for the $2,000?"
LO: "No"
Us: "Of course not, that would be silly."