At the start of this year, after a lifetime of renting, I decided to buy my first home.
For a prospective home buyer, it was the best of times, it was the worst of times. It was “a great time to
buy,” because housing prices and interest rates were low. On the other hand, slaying a three-headed dragon
with a penknife was easier than getting a mortgage in 2012. After the extended drunken lap-dance which
characterized transactions in the mortgage industry for nearly a decade, lenders had now become the
shapeshifting ogres who guard a wizard’s golden treasure.
Moreover, no mere mortal’s battle with such creatures, I assert with confidence, can equal the challenges
facing a full-time, self-supporting midlist novelist who has no salaried spouse or day job to bolster her mortgage
application. Indeed, it’s amazing how fast and flagrantly a banker’s initial desire to sell you a mortgage
vanishes when you use words like “self-employed” and “freelancer.” With my realtor’s help, I managed to
find one—and only one—mortgage officer still interested in talking to me after hearing these phrases.
And so I waded into the river of fire, i.e. commenced the mortgage application process.
I had so far been operating on the assumption that I could afford a mortgage payment similar to my
monthly rent (an assumption gleaned from the homebuyer books I’d been reading as a devoted new acolyte).
The mortgage bank, however, judged that the most I could possibly afford to spend on PITI was about 80
percent of that sum. (PITI is a monthly housing payment comprised of mortgage principle and interest, property
taxes, and homeowner’s and mortgage insurance.)
A particularly nonsensical aspect of this estimate was that the bank based its figures on my taxable income
(the “adjusted gross” on my 1040 form) rather than on my gross income. Well, I sensibly take every
tax deduction to which I am legally entitled—such as the cost of my home office, for which my CPA deducts
rent, utilities, and other relevant expenses every year. According to the bank, those deductions represent
money I cannot spend on housing... precisely because, um, I spend it on housing. And I soon learned that explaining
this to a mortgage bank is like reasoning with the sea.
However, by the time I met with the mortgage officer, I had already, through several months of research,
realized that my best bet for buying any dwelling better than a giant shoe in a haunted forest would be to apply
to various government programs aimed at helping first-time homebuyers.
The difficulty in researching such programs is that they change from place to place and from year to year.
My city, county, and state all had various programs, some of which overlapped, and the rules and requirements
for them varied. Many areas have good fairies, i.e. non-profit agencies, which offer free classes, approved
by the Department of Housing and Urban Development (HUD), to inform people about current programs,
as well as to educate prospective homebuyers. Their goal is not only to get renters into home ownership,
but also to teach them how not to wind up in foreclosure.
(Anyone who’d like to know more about homebuyer programs, please contact me at LaResnick@sff.net.
Since various friends have already asked, I’ve prepared a document with relevant information, and I’d be happy
to email it to you.)
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