Since that time I have done a lot of waiting.
The appraiser came out to the home to provide his assessment of the property now and what it will appraise for after my renovations are complete.
The result came back to my loan officer Julie on March 11. At the very end of the day on March 13 I received an email from her. The only thing it said, in the subject line was "call me first thing in the morning".
That was it. No message. No further explanation.
Unfortunately for Julie, this is par for the course. Her communication skills do not align to my expectation of good customer service.
So the morning of March 14 I call her.
Apparently the appraised value of the house after all the work is done is about $10,000 less than the purchase price plus the renovation costs. She doesn't think the loan will be approved with that much discrepancy.
"Um... ok. So what do I have to do?"
She didn't know really. She couldn't give me a good answer, other than reduce my renovation costs. Or maybe cough up more for a down payment.
So I went back to my contractor and completely cut the scope of the kitchen remodel. Goodbye quartz countertops, hello laminate. So long solid hardwood floors, welcome engineered hardwood. Take out the costs of the sink, faucet and range hood. I'll pay for that separately. Oh, and those other things you wanted done around the house, like fix some of the cracks in the brick. Nope.
All in all, I shaved about $7000 off the renovation budget. That doesn't mean that some of the things that I wanted won't get done. It just means that it wont be done from the 203K budget.
Anyway, the revised renovation estimate was sent back to Julie to resubmit for the appraisal. (I really don't know why.)
The rest of the 21st. I waited. The entire day of the 22nd I waited. I left multiple emails and voice mails for some kind of update. But no word from her.
|Give it to me now!|
In the meantime I was also playing with my financial spreadsheets, trying to understand the calculations.There are two dollar amounts from which to make that financial assessment that I was asking to borrow too much.
The first number is the purchase price plus the renovation costs. Let's call that X.
The second number is the purchase price, plus the renovation costs, minus the down payment. This is essentially the mortgage amount. Let's call that Y.
So if Julie was saying that there was a $10K discrepancy, then she was basing her calculations on X. However, if she was saying that I could offer more for a down payment, then she was basing her calculations on Y.
To me, basing the difference in value between the assessed amount and the mortgage price, value Y, is the logical choice. So with that, I'm not $10K off, I'm $4K off.
Finally on Monday the 18th I called her. She got a verbal confirmation from the lender that the reduction in renovation costs will not change his assessment. It will still appraise at the same amount. But she was still waiting on his paperwork (?) to resubmit the loan application.
From my calculations, the new mortgage price, with the reduced renovations estimate and my down payment, will bring me below the appraised value, just slightly. Which is good. But since the bank will not likely let me borrow almost 100% of the appraised value, I might still have to add a little more for down payment. But its more like $2K rather that $5K.
To summarize, this sucks.
It sucks that I have to be nice to Julie because I need her help. Even though she is a sucky communicator and I want to hurt her every time I hear (or don't hear) from her. Even though she leaves me with more questions than answers. Even though her customer service is for crap. Even though I can send her specific questions and requests and she'll respond with a one sentence answer that didn't even reply to what I asked.
I'm supposed to close on the house in 8 days.
I'm supposed to move out of my apartment by April 30.
I'm supposed to have the kitchen work complete before I move into my house.
I'm so aggravated, I want to swing a cat around over my head by the tail.