This blog has a lot to do with building a house on an extremely small budget. Most of you know that this year has been rough for us financially to say the least. Rough mostly BECAUSE of this little house project.
A few weeks ago, I started thinking, huh...even though RJ is making money again and I'll soon be starting 4+ months of employment at Creede Rep, my mom and step-dad are coming to visit in mid-June. And staying with us. So...how are we going to get this freakin' downstairs bathroom done in a timely manner AND out of pocket...? And oh god the siding...
In any case, shit needs to happen. And soon. I decided to ask the bank what it would take to add a bit more of a balance onto our mortgage/construction escrow loan in order to finish our final, larger projects. These projects include the downstairs bath, siding/paint on the addition, and trim/baseboard throughout the house. We had tapped out the last of the original loan in December. Though it got us to the point of moving in, the loan is based on the appraisal of the finished house. And while there's technically no time limit required to finish it, for our mental and financial sanity we need to get this thing done.
I told RJ early on in this process that I never wanted to live in a construction site. And truthfully, he's kept it all pretty well under control. I also accept the fact that he/we will be constantly "improving" this house and I'm all for that. And I also know that RJ truly does want to finish it as much as I do. But I can only take uncovered walls and no trim for so many months before I start emotionally eating Hostess products on a daily basis.
I want to add that putting together an estimate for a construction loan/refinance when you've never done anything like it before is a huge learning experience, complete with a good dose of failure. As I may have mentioned before, when you apply for this type of loan and are doing the work yourself, they have you write out a detailed budget. VERY early on. So, you do the best you can. But, you always end up underestimating or leaving SOMETHING out. And oh...did we do both these things. Plus, when you work on an older structure, terrible surprises are around every rotting corner. We didn't figure in that the homeowner's insurance, property taxes, and flood insurance we didn't know we needed, would be escrowed in and therefore taken out of the total construction loan. That, plus realizing that doing the plumbing ourselves was basically impossible if we wanted to move in before the end of the year, left us with a lot less money for materials than originally anticipated.
So, I emailed the bank. They responded to my request and it's a bit more complicated than simply adding on to the balance of the original loan (of course). As I understand it, in order to balance out the debt to appraisal ratio of the original loan, we have to go from a 15 year to a 30 year mortgage and then add a second, short term mortgage for the additional funds, which are well under $10,000. We got a second opinion from RJ's former banker sister-in-law to make sure the details seemed sound. She said they did. On the plus side, we'll have a bit of a cheaper mortgage payment, though the interest is a bit higher on the second mortgage. But this will allow us to get all the major stuff finished. We've sent in the necessary fees (OF COURSE) to set this up and now we wait for approval in the form of an updated appraisal, which is done simply from a paperwork standpoint (and costs $150 frickin' dollars!!!) and then we can close for another couple hundred dollars. (Sick of fees yet? I certainly am.) Once that happens, we can start to pull money from the new loan to pay for the materials, exactly like we did the first time around.
In my ideal world, this will happen in a week--though I'm not optimistic. Then we'll need to order the supplies, and some of it will have to be transported from Denver. Plus, my season at CRT starts in less than a week, so my time will be much more limited. And all the while, RJ is furiously finishing his current work project. So...we'll put our faith in the gods of housebuilding to pull this one off. Otherwise we'll be sharing our master bathroom with my parents. Awkward...
In small time news:
*I primed all the downstairs windows so they'll be ready for paint once the trim goes on and paint colors are selected.
*I also painted the large back door blue. Because why not.
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| Blue door. But it's not sad. |
I sympathize with the financial situation, the emotional eating, the desire to have a finished home to decorate and never think of remodeling again. Someday my friend we will have wine on the porches of finished homes. I'll bring the wine.
ReplyDeleteGuin! Totally. It's so exciting and also a stressful time. We'll do it! (Though sometimes I feel like I need to learn how to build more stuff so I can do some of the work myself!)
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