We’re really excited (hence the all-caps). We finally (FINALLY) completed what seems like the loan drama that wouldn’t end.
I’ll start at the beginning. A long time ago (last January to be exact), Dadtractor came to us and said, “Kids, it’s time to build.” The cost of building (per square foot) had dropped dramatically and for once, a recession was working in someone’s favor. We talked about it but soon realized Micah and I would never qualify for a construction loan ourselves and even if we did, we would get a crazy interest rate – like 13-15%. We told the parents that the house wasn’t in the cards.
Dadtractor pow-wowed with Momager and they offered up a solution. They have a long credit history and could easily borrow money at an incredibly low interest rate, so they suggested they borrow the money to build the house and lend it to us. Once the house was done, we would borrow money to buy it from them. Yes, very confusing. We own land, they own house, we borrow money to buy house from parents. Sounds good right? Sounds straight forward right? Not at all.
So problem #1 was that we couldn’t buy the house from them. Technically we owned the land and therefore we owned what was on top of it. Well poop. There goes the first-time home buyer credit. No biggie. We would just refinance.
We spoke to a few banks and looked into refinancing the house. After a lot of deliberation, we decided to go with a mortgage broker. I know, you hand them 1% of what you are borrowing. Seems like you could do the work yourself and save that money right? Well yes, you could but we knew we needed the help.
We decided to go with a friend of Micah’s from high school, Jon Wagher. We knew we could trust Jon and they he’d give it to us straight. Everything looked pretty straight forward but it wasn’t. Poor Jon.
When we were finalizing the paperwork for our loan, Jon realized that although the county records showed the land was in my name (so we could pay property tax), there was was still some paperwork missing – a promissory note. This is problem #2-100. We couldn’t close without it.
My parents purchased the land from an old Filipino couple in 1986. When the old Filipino couple sold the land, they still owed $9,000 to the land’s previous owner, we’ll call him Mr. A (A-hole). My parents bought the double lot for $13,000 -- $4,000 went to the Filipino couple and $9,000 went to Mr, A. Momager sent the final check to Mr. A in 1988 and even recorded the check number. She sent him a note asking for the promissory note stating that the debt was paid in full. She never got it and she and her lawyers forgot about it. Two decades later we find out the title company wouldn’t approve the refinance because they couldn’t be sure that Mr. A wouldn’t come back one day and say he was never paid. Awesome. For a brief moment, Micah and I were worried we may not own the house we were living in.
Our biggest worry at first was finding Mr. A. My parents knew that the couple they bought the land from were in the Philippines somewhere. Somehow, Jon found Mr. A and it turned out he was alive and living in Napa County. Jon placed a call to Mr. A, explained what he needed and Mr. A said he was happy to sign the note. He acknowledged that the debt had been paid years ago.
We were all VERY excited, Jon overnighted Mr, A all the necessary paperwork on Feb 9. He called several times after that. He sent the paperwork 3 more times. Nothing. He called and still nothing. Mr, A made excuses. My parents got involved, their lawyers got involved, the escrow company got involved. Nothing. Mr. A wasn’t denying he was paid in full, he just wasn’t signing. He told the lawyers he’d overnight the paperwork back and then the next day said overnighting mail wasn’t possible from his town. Right. Everyone was at the end of their rope. Dadtractor was “spirited” and threatening to sue his own lawyers, Momager was now referring to Mr. A and Mr, Huge A and Jon probably could have (and might have) punched a few holes in several walls. We were anxiously looking at our budget and trying to decide what it would mean to pay a half percentage more in interest for the life of the loan. As each day went by, we got closer to our loan offer expiring. If we filed for a 30 day extension, our interest rate would go up a half percent.
Yesterday we waited, we called everyone we could think of, Jon was coming up with option after option to keep us going. Then someone -- maybe Jon, maybe Momager, maybe God – came up with the idea of hiring someone to go out to Mr.A’s house and getting him to sign. Every trip to Mr. A’s house would cost us $100. We couldn’t decide what to do. Do we risk him not answering the door? Dadtractor said to go for it, so Jon placed the call. He let us know at 5pm last night that someone would be visiting Mr. A later in the evening. A little after 7pm Jon called me.
And guess what? The news was good. Mr. A signed the papers!!! We’re all very relieved but also a bewildered. What was the point of not signing in the first place? Did he just want us to spend a couple hundred dollars in postage? Did he just want us to suffer? It’s hopefully over now. We’ll finally owe lots of money to a fine financial institution for a house that’s in our name. Phew!
This whole ordeal did make us really appreciate our friends. Jon could have (and probably should have) walked away a long time ago. Yes he’s getting paid 1% of the loan, but our loan isn’t huge. Let’s just say it’s not enough to buy a 2 bedroom house in Seattle. If we calculate what he got per hour, I’d say it probably around minimum wage. That’s dedication folks…and a good friend. We’ve got a thank you plot up our sleeves.
But in the mean time, if you are thinking about buying or refinancing, and you are looking for a mortgage broker, we HIGHLY, HIGHLY, HIGHLY recommend Jon Wahger (firstname.lastname@example.org). He’s got a mortgage blog that you should read if you are thinking of buying or refinancing a house. Going with Jon might be the best house decision we ever made. I’m not sure what would have happened if we had chosen to go through a bank directly. I guess we’ll never know and that’s fine by us.