My $1 Million Mortgage Journey . . . Here We Go!

[Revelate]

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@youdontkillmoney wrote:

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@Revelate wrote:

Out of curiosity what did your RE think of your offer?  I may have missed it in the run of things; there's always some shock offers when something first gets listed but if they're still talking they haven't flushed you entirely yet whereas if they thought it was utterly and absurdly lowball, they would've walked presumably.  Just starting the summer selling season, what'd you get from the walkthrough, kids or no, and why they were moving?

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^^^^^

My RE himself thinks in the mid to higher 800's would be reasonable in light of the renovations needed. The last time the house was sold was in 2001 for $500,000.

As for walkthrough, the reason I seem to always get is the owners' kids have grown up so they are downsizing. We don't have any kids and in the walk through one aspect we didn'nt like but we could live with is the walk-in closet is adjacent to the bathroom (though there are doors that close) and worry about mold, yard in the back could be bigger with more privacy since neighbors can view straight down, and it's about 1.5 hours from wife's work (further for mine probably but I leave early comiong in and out of work and can deal), and of course the carpet throughout needs to be gutted and replaced with hardwood, kitchen and bathrooms need renov., has not been updated since 1995 when it was first sold as new for mid $300,000's. I estimated the renov will cost between 60-100k. Maybe the West Hills area is worth $900K+ and I will have to accept that. I don't know yet.

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Yeah, don't know either.

Oh I do have a current closet with a door in my condo bathroom, I know the humidity isn't anywhere close to the same there as I can hang out a shirt in the bathroom when I take a non-absurdly-quick shower)and the wrinkles will somewhat relax out; however, in the closet some of the shirts which I didn't iron straight away are just as rumpled as when I tossed them in there .  Actually the old place the wrinkles would have all fallen out come to think of it, but I had a mold issue there so clearly the humidity was likely higher.

I have a humidity monitor floating around anyway in the current place when I was trying to diagnose a sleeping issue: I'll throw it in the closet when I next take a shower and see the before and after, but I don't think it's a huge concern at least.... if it is markedly different, I appreciate your theorizing it as I'd never even considered that previously haha, but my default humidity is low 40%'s anyway which is well under the mold growing threshold in this place.

[Anonymous]

Any update?

[youdontkillmoney]

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@Anonymous wrote:

Any update?

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^^^^^^

Nothing new. 

On the loan front, (1) US bank was supposed to send me some disclosures and I asked to be "underwritten" ahead of time, (2) SoFi is still processing their underwritten pre-approval. I've already gotten an "underwritten" approval with (3) Wells, (4) Capital One pre-qualified me, (5) Instant Capital direct lender mortgage broker pre-approved me; all of these lenders for $1M purchase price and 10% down; SoFi was willing to go as high as $1.6M, Instant capital $1.1M, Wells said they can go a little higher than $1M...but I asked them to limit it to $1M. I hope I don't have too spend $1M for a home, just because we are credit approved for it does not mean we want to, ideally $800-$900 but we are willing to go to $1M for the right home. It's been quiet on this front. Pretty set here until I get a contract.

The first home we were negotiating, we are at an impasse, my last offer was $855, they said to come back to them when we are willing to start at $900 so I didn't even get to go up to my $875. I suppose when they realize they are priced too high (or not?), they may contact us.

In the meantime we are continuing to look, our next availability is June 11-12 weekend and we'll look at a few homes. So the stage we're in is "looking for the right home."

[Anonymous]

Do you mind mentioning your annual income. Yours/Wife's. Also, what type of loans do you currently have on file to have such a great score like that. If you can give advice on how to reach 800s, for instance, how much you leave reporting on your cards (how many cards with balance, as well as the total cards you have). How many car loans if any.

Basically any info you can give that could make some like me follow and get that high one day. 

Much Appreciated

[youdontkillmoney]

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@Anonymous wrote:

Do you mind mentioning your annual income. Yours/Wife's. Also, what type of loans do you currently have on file to have such a great score like that. If you can give advice on how to reach 800s, for instance, how much you leave reporting on your cards (how many cards with balance, as well as the total cards you have). How many car loans if any.

Basically any info you can give that could make some like me follow and get that high one day. 

Much Appreciated

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^^^^^

My annual income is $120k full time, part time $10K.

My wife's annual income is $164k

Total $294k.

My signature has current lines of credit.

No loans with balances right now. we both had student loans, paid off.

No car loans currently, we paid cash for ours.

Wife in the past had car loan, paid off.

I've had credit for 25 years since 1991. Wife about 20 years.

We mainly use Amex and when not accepted a mastercard, but always pay them all off in full each month, sometimes before the statement closes I transfer money into the credit cards to pay then off.

Basically if you want to reach 800 like us, use credit but pay in full (sometimes I'll pay over 3 months to show on my credit report timely payments and then pay it all off after a few months, but I'm sure there's people with 800+ scores who do not pay in full, but make timely payments and don't have high utilization), never be late or miss a payment (I track bills due on a calendar, Google calendar where I manage my life)....do this for a long period, myself I;ve done it for 25 straight years. Perfect payment history. I only use 1-2 credit cards. Don't keep on applying for credit and generate inquiries on you report. Check your credit report regularly to make sure they are accurate.

[youdontkillmoney]

I'd like to emphasize the importance of hoarding as much cash as you can from acceptable sources, even though you may have already gotten pre-approval like we have, to ensure you finish strong when you are in contract and the final underwriting begins. As I mentioned in a previous post, we decide to cease extra retirement and tax payments, or minimize to just get the employer match portion.

This paycheck we are seeing results, my paycheck is $1200 more a pay period after taxes (I stopped an extra $500 a pay period for extra tax payments, stopped 401k contribution of $600+, stopped an annuity payment of $200 a pay period, and stopped other non payroll deduction retirement payments); my wife's paycheck also inceased after tax since she only contributes 6% to get the employer match, so she saw $900 more a pay period, and since we reduced my PPO health particiation under her employer (since I have Kaiser under mine and for the past 2 years never used my PPO under her so it was a waste of $400/month for PPO for me), she should have $200 more a pay period soon, or $1000 more a pay period; total between her and me about $2200 more a pay period or $4,400 a month.

So we are socking away more cash now to prepare for the closing to ensure or pre-approvals go through in the end.

For those planning to app for a mortgage, within the next year, I suggest finding ways to reduce expenses or deductions and start socking away mounds of cash for the downpayment/closing/reserves.

[Anonymous]

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@youdontkillmoney wrote:

I'd like to emphasize the importance of hoarding as much cash as you can from acceptable sources, even though you may have already gotten pre-approval like we have, to ensure you finish strong when you are in contract and the underwriting begins. As I mentioned in a previous post, we decide to cease extra retirement and tax payments, or minimize to just get the employer match portion.

This paycheck we are seeing results, my paycheck is $1200 more a pay period after taxes (I stopped an extra $500 a pay period for extra tax payments, stopped 401k contribution of $600+, stopped an annuity payment of $200 a pay period, and stopped other non payroll deduction retirement payments); my wife's paycheck also inceased after tax since she only contributes 6% to get the employer match, so she saw $900 more a pay period, and since we reduced my PPO health particiation under her employer (since I have Kaiser under mine), she should have $200 more a pay period soon, or $1000 more a pay period; total between her and me about $2200 more a pay period or $4,400 a month.

So we are socking away more cash now to prepare for the closing to ensure or pre-approvals go through in the end.

For those planning to app for a mortgage, within the next year, I suggest finding ways to reduce expenses or deductions and start socking away mounds of cash for the downpayment/closing/reserves.

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Great advice. I will start this month. Thanks and let us know when you see the next houses.

[Anonymous]

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@youdontkillmoney wrote:

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@Anonymous wrote:

Any update?

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^^^^^^

Nothing new. 

On the loan front, (1) US bank was supposed to send me some disclosures and I asked to be "underwritten" ahead of time, (2) SoFi is still processing their underwritten pre-approval. I've already gotten an "underwritten" approval with (3) Wells, (4) Capital One pre-qualified me, (5) Instant Capital direct lender mortgage broker pre-approved me; all of these lenders for $1M purchase price and 10% down; SoFi was willing to go as high as $1.6M, Instant capital $1.1M, Wells said they can go a little higher than $1M...but I asked them to limit it to $1M. I hope I don't have too spend $1M for a home, just because we are credit approved for it does not mean we want to, ideally $800-$900 but we are willing to go to $1M for the right home. It's been quiet on this front. Pretty set here until I get a contract.

The first home we were negotiating, we are at an impasse, my last offer was $855, they said to come back to them when we are willing to start at $900 so I didn't even get to go up to my $875. I suppose when they realize they are priced too high (or not?), they may contact us.

In the meantime we are continuing to look, our next availability is June 11-12 weekend and we'll look at a few homes. So the stage we're in is "looking for the right home."

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Thanks for the update. 

[tacpoly]

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@youdontkillmoney wrote:

I'd like to emphasize the importance of hoarding as much cash as you can from acceptable sources...

For those planning to app for a mortgage, within the next year, I suggest finding ways to reduce expenses or deductions and start socking away mounds of cash for the downpayment/closing/reserves.

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This is true.  Saving for the down payment should be the first step when planning for buying a home.  In fact, one should be saving even when buying a house is just a vague notion.  Having at least 20% down saves money (not having to pay PMI) and it demonstrates to the mortgage underwriters that the borrower can carry the extra cost of a mortgage.  

[youdontkillmoney]

The dilemma we face and for each choice the home cost is about the same, is (1) buy closer to work but a smaller, older home or (2) further from work, a new, bigger, grand home.

Each can cost easily $800k-$1M here in Los Angeles. 

In terms of distance, closer to home commute can be under an hour, say 30min-45min but an hour tops. Further from home, prob min 1.5 hours or thereabouts.

On the one hand for $1M I would rather want a larger, nrewer, more grand home so I feel like I get value for my money. But prices nearer L.A. city center will more likely retains its value oer time, even if it is a not so new or spacious property. On the other hand, after going through 21 years of school, wife 19 years, working hard at our jobs, I want to be able to live in a home I can be proud of, that would be the newer, more spacious one further out, the tradeoff is more commute time, but it'll be a home we can be proud of. A home we'd be proud to have people over and entertain, etc. I feel if we get a home closer to work that is older and smaller, I'll just be living to work, not working to live. Or maybe I'll feel I'm living to work if I get a home further from work with a commute. Sometimes when I drive home from work and about to get off my exit, I look at the freeway traffic ahead and ask myself "If I lived where I may want to live, it'll be another hour of driving . . . do I really want to do that?"

Have you in your home buying process reconciled this, what did you choose?