A Home Loan of Our Own

Holy Cow! They Gave Us a Mortgage!

A Home Loan of Our Own
By Jason Stout

When I arrived in Austin from Washington, D.C., some nine years ago, Austin was still reeling from the economic bust of the Eighties. The signs were everywhere: the ghost town that was downtown, the multitude of available properties for sale, and the mind-bogglingly cheap commercial and home rentals. It was this cheap rental market that caught my eye, and I never looked back. My first foray into the world of Austin home rentals was an efficiency apartment on West Campus for $250 per month. As I had just come from sharing a house, for which six roommates and I were paying $2,200 collectively, I took the efficiency without looking at anything else. It was only after being here a few months that I realized that West Campus was a high-rent area as far as Austin standards were concerned. From there I discovered lovely South Austin, where my rents went consistently down in price: from $300 for a one-bedroom house, to sharing a four-bedroom house with a total rent of $500, to my ultimate dream rental -- a one-bedroom "cottage" where I paid a quite doable $215 per month.

To my friends back East I cackled, "Can you believe it???" What a coup, I thought, what a dream come true. Finally my own little house with a little yard and neighbors to wave to and share cups of sugar and various other sundries with. It didn't take long for this little house to become home -- a house I would call home for longer than almost any other.

As the years passed, the bust slowly faded and the boom crawled back neighborhood by neighborhood. The buildings downtown filled up with businesses and offices; all over town vacant lots that had stood as such for so long were purchased and planted with brand-new houses with brand-new price tags. Everywhere you looked renovation was happening. One abandoned downtown section, an area I had considered nothing more than just a safe side route on which to ride my bike, was inhabited and even given a hip new name: the Warehouse District.

In all my years as a tenant I learned there were three things that didn't bode well for the average renter: a new awning on the building, the changing of a description of a building from "walk-up" to "townhome," or, and possibly the most damning, the naming of the neighborhood. All indicated rents were either about to skyrocket or the buildings were about to go condo. Either one usually left me scrambling for new living quarters.

As the changes occurred around me in my wee rental in South Austin, I remained relatively unscathed but scared nevertheless. In my cheap little cottage I heard stories about rents doubling and evictions with 30 days notice. One afternoon as I sat in my yard I watched bewildered as my landlord came by and planted four new crepe myrtle bushes on the front lawn. To anyone else this may have been nothing more than the sign of an active landlord but for me -- I had never even seen my landlord -- it was a sure sign he was going to sell.

"We should buy a house," I said to my husband, who had joined me in my cottage a few years into my stay. He laughed it off as an absolute impossibility, "And what would we do with the rest of our millions?" It turned out those crepe myrtles were nothing more than that, yet still, it left me feeling tentative, a familiar feeling to those locked in the world of renting.

Another year or so later the house behind us sold -- a shack where the same family had been renting for over 20 years. The family left, the house was knocked down, the lot was split in half and two brand-new houses were built in its place. They sold for nearly $200,000 each in a neighborhood where just a few years prior houses were going for less than $20,000. And, though our rent was still reasonable, it did consistently climb, and the last lease had a new clause which stated "in the event of sale, you have 30 days to vacate."

That made me even more nervous.

I became obsessed with the housing market. As landlords jumped for joy at the 97% occupancy, I cried in my coffee. Every week there were new articles in the newspaper, in larger and larger fonts: "Housing Prices Soar!!!" With each passing week, prices escalated at rates that were unfortunately not in sync with our savings. We found ourselves further from our homeowning goal.

As I scoured the daily paper's Sunday Real Estate section, I thought that there had to be another way. Continuously dipping interest levels gave me hope as did blind faith that somehow, somewhere, there was an answer. So many people were buying, surely they didn't all have huge sums saved. I searched the ads and found what I thought I was seeking, "First Time Home Buyers With Little Down Payment! Call Us First!" And so I did.

At the scheduled appointment, I told the realtor which neighborhoods interested us -- after watching the ads for so long I already knew the names of my real estate zones as well as their price ranges. Our criteria were simple: cheap and close to downtown. This guy nodded his understanding very enthusiastically -- almost too much so. He then came back with a list of houses that were just over the price range and way outside of town. I told him again. "Oh yeah, I gotcha," he said "Let's see what I can find." Again he came back with a list. Again he didn't get it. Instead he insisted that what we wanted didn't exist where we wanted it, and we would just have to settle for what he showed us. I was bummed about it but believed him. He was very anxious to get us moving. His need for speed was what first sparked our concern and skepticism.

Still, with his list in our hands, we drove around checking out the houses. They were cheap all right, but horrible and nowhere near where we wanted to be. "You know," said my husband. "If we have to live this far outside of town we should just go somewhere else. There's no point in buying here if we can't live how we want." I agreed and so we sank back into our somewhat comfortable existence as renters in our cheap house close to downtown.

With much less enthusiasm, I continued to eye the market. "Look at this shack for $100,000. That's crazy! Who would pay that?" I cried, as I pored over the real estate ads. Then the news: a baby was due. We were becoming parents! Our rental would suffice for at least the first year of baby's life, but after that my comfy little cottage would be a wee bit cramped. We knew that something must be done, but also knew that moving into another rental, with the prices what they were, was just not an option.

Foiled by our first experience with a realtor, I was back to the newspaper ads. "Let's look at it," I would sigh as I read to my husband the details of a close-by open house. As a carpenter, he liked looking at various houses and how they were constructed, so his interest was piqued, no matter what. I went as a hopeful buyer; he, being the more realistic partner in our union, went as a mere spectator with an hour to kill on a Sunday afternoon and not nearly enough money in the bank to change his mind.

I cried to my brother about our plight. He gave me the best advice I had gotten thus far: "Find another realtor. Keep trying until you find one you like and understands what you want."

"But I don't really know how to begin the whole process," I moaned.

"I just told you, begin with a realtor. Find two if need be. They'll tell you exactly what you need to do. They want you to buy a house, the banks want you to buy a house, you want you to buy a house, so how can you lose?"

A few weeks later I found a "For Sale" sign in front of a house in the neighborhood we wanted. Wary from our experience with the messenger of haste and negativity that was our first realtor -- I called the name on the sign anyway. We met and liked him immediately. He knew exactly what we wanted. Better than that, he was encouraging, "We'll find something for you. It may take a while but we'll find it." The realtor whose name was on the sign was to become our new realtor, the patron saint of hopeless causes and renters in despair!

This guy was awesome. He lived in the neighborhood and knew it like the back of his hand. He didn't call very often but when he did it was to show us something that might work out.

We walked through quite a few houses and after a while started to feel like Goldilocks on a bad trip. Some houses were too small -- there was no way you could have more than one guest over at a time if you planned on all sitting in the same room. Some were too Texan, or should I say, Southern, in their architecture. I'm not talking the grand styles of the oil boom or the columned mansions of Tara. I'm talking about single-wall shacks where the exterior wall is the interior wall and never would any type of wiring or insulation or other modern-day convenience get between them. These more resembled packing crates than any type of abode and are all built practically the same way. Some were destined for the bulldozer -- a lot without the benefit of being cleared or prepped for building. Some were just plain ugly, without any hope of redemption -- asbestos boxes on concrete slabs with aluminum windows, with roofs covered in the cheapest rolled roofing money could buy. I suppose we should have marveled at these -- that they could make a house with so little use of actual wood or stone or other natural product. Some left us laughing. "Did you see that kitchen?! Linoleum sheets over concrete floors! Fiber board cabinets! 1/4" plywood countertops!" And still, some left us crying, "That's what we can afford?!"

Our visions of renting until the end of time danced in our heads.

Fortunately, our realtor hooked us up with yet another saint, a mortgage broker. "Call this guy, he'll help you out." As we weren't exactly the ideal mortgage seekers, he thought a mortgage broker would be more helpful to us than a bank. Both of us were self-employed and had been for only a short time. Our collective income was, well, let's just say it was best left unmentioned. The broker told us this straight up and also told us what we could do to get around it.

The broker went through our financial records with the proverbial fine-toothed comb. While we may have preferred he used a rake, we knew he was doing what had to be done.

"Back in 1989 you had a bill with Commonwealth Edison in Illinois that was a few months late. And I see here that you were delinquent on a phone bill around that same time. You'll need to explain those. And Bernadette, it looks like you still owe tuition money in D.C. for a class you took in 1987. And this Visa bill from 1991. -- It's paid now but it took a while, you'll need to explain that and deal with all of those others before we can do anything." Suddenly we were in touch with a past we had thought long left behind: Financially destitute times, bad roommate situations, and alcoholic ex-boyfriends were staring back at us from the pages of our credit record. This was the part of the permanent record the nuns never mentioned but should have. For weeks we were faxing, calling and straightening out overdue, overlooked, or erroneous reports.

That all cleared, we were on our way to mortgage approval. An aunt who recently passed away left us with enough money to push our application over the top. Now we had enough for a respectable down payment, which meant we could afford a little more house. Lee continued to show us houses, and we continued to balk until that moment that so many homeowners had told us about. We saw it, and we just knew. "But how do you know?" we always used to ask. Now we knew. Just as we knew when it was wrong, so too did we know when it was right.

We knew almost before we even went inside. On a giant, tree-covered lot close to downtown stood a house built by a carpenter in 1947. It was small but it was solid and it had serious growth potential. The family of the man who had built it were the ones selling it. We felt quite privileged. I come from family with a long line of carpenters and had married a carpenter, so to buy a carpenter's house seemed a sign, indeed. At that point, anything at all was a possible sign.

"Is that it? Can we swing it?" we deliberated. "It needs some work. Are we ready?" We asked ourselves all the usual questions that one must ask before entering into a 30-year contract of debt. We pictured our girl playing in the grove of fig trees and climbing the giant pecans. We thought of how we could expand the house should our family expand again, as was the plan. Within 15 minutes, we called Lee.

"Okay, we want it."

Cool as a cucumber, yeah right.

While the anticipation and legwork had stretched on for years, the actual purchase process passed like a brief and hazy dream. We met the owners. The papers were drawn up and time frames were discussed for closings and mortgages and inspections and move-outs and move-ins, and it all seemed like somebody else's life because surely we were not ready to be homeowners, were we?

Well, ready or not here we were and just several short weeks of juggling finances and breaking out in cold sweats at the sheer magnitude of the whole idea, we were in a big high-rise bank building downtown going over stacks and stacks of papers with the realtor and the owners and a lawyer. And we were signing our names on each and every sheet, not really quite sure what we were signing but taking their word for it each time they said, "and this one is just standard -- " Then we handed over the giant check, the one so big that we had the teller that issued it pose with us for a picture. Congratulations and good lucks and thanks were said, and we walked out and looked at each other absolutely dumbstruck.

We had just spent more money than we had ever dreamed of spending in one place and we owed more money than we'd ever owed, yet somehow we felt more free than we had ever felt in our lives. Our fear was that we'd feel tied down, but in reality, no matter what we did or where we ended up, this purchase would give us freedom we had never known before. With that one act, over three years from impossible dream to holy-cow-they-gave-us-a-mortgage, we were homeowners with a hammer and a plan.

Now stay tuned for the renovation saga... end story

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