It was just a matter of time

Before the issues the financial sector, and the economy are dealing with right now came home to roost. Despite my previous post of encouraging progress from the bank, I got a call today telling me that the deal was not going to work as originally thought. The result, was that the bank was looking for a larger percentage of the loan amount down at the initiation of the loan. As a result of things I had set in motion a while ago, this was what I have been budgeting for to this point, and it was the limit we were prepared to pay out of pocket. While we can afford to pay the extra amount of money, its past our comfort level, and we are going to wait til the spring to see how the market looks at that point.

Up to this point, we had just as much going for us with the down market as we had against. By this I mean that all we were going to give up - small mortgage to big, renting our other house - we were going to be able to mitigate with buying better from the contractors, and getting better deals on items for the house then we would have in a normal market.

Alas, it is not to be for this year. We are most likely not even going to tear the house down. It seems that with everything the way it is, we are better off leaving it up, then renting a temporary fence for who knows how long.

The upside in all of this is we can pull back the reigns and be able to take a good hard look at everything we are doing, so we can get the best deal possible on whatever we are going to use in the house.

I will update sometime in the near future.

Closer to Decision Time Then We Were Last Week

Well, we are through the first hurdle of qualifying for the loan. While that was more a formality then anything else as I did plenty of confirmation before we bought the property, its still an important part of the process. With the general financial health of both individuals and banks, nothing is a certainty anymore.

We are now on to the appraisal portion of the bank's obligatory work. The process now moves to the architect and appraiser to establish as projected value for the home when its finished. This will determine if our budget meets that value. If the two are equal, then we should have a deal, and we will just need to move through the process of closing the loan to be ready to go. If the appraised value comes up short of the projected budget, then we will have to asses how far, and if there are costs that can be pared to get close, or if we are going to have to sit things out for a half year or more. This would be done to let property values settle, or to come up with more money to help finance the deal. This is the spot that I have been most concerned about from the very beginning, as its quite subjective and very difficult to asses in this market.

Nevertheless, they will be doing this either way, and once they are done in a week or so probably a little more), we will know what our options are, and where we are going. This will also be the time that we will be ready to knock the house down. If the demo permit happens to come through earlier then the appraisal, then I think we will most likely bring the house down either way so we can go if the bank gives us the green light.

We took the two trees out of the back of the yard, and its a nice preview to the demolition that is coming. I am going to take a few more pictures this week to refresh everyone's memory, and so that the progress will have a good benchmark to start from.

Either way, in 2 weeks, we will either have a piece of empty land, or we will have a piece of empty land with a BIG hole in it.

I am hoping for the latter, its more fun.