All About the Benjamins

Disclaimer: I am not a banker, an economist, or even really smart when it comes to numbers. Therefore, the following is simply my pedestrian interpretation of mortgages as I understand them. Ask a professional if you have questions, and good lord, do not take actual financial advice from me.

As I am sitting here with Hoot, the boy I nanny during the year (and yes that is just a nickname, creepy internet stalker people), I figure writing a blog is a better use of my time than counting down to the start of the new Wizards of Waverly Place movie. Obviously.

Yesterday, I spent about two hours chatting with my new personal banker. Who am I? Anyway, although I don't want to share a lot of personal financial information, I did want to give an account about the whole mortgage process.

Now, my understanding of the so-called "mortgage crisis" is very limited, but apparently things are very different now that the banks are recovering from giving out a bunch of sub-prime mortgages. Basically, banks started giving loans to people who weren't necessarily able to pay the monthly payments... thus people falling behind and all the foreclosures we are hearing about.

The result? It makes it even harder for people to get a secondary market mortgage now. There are about fifty requirements, and if you don't meet all of them, you don't qualify. Everything from your credit score to your employment history and even the fiscal responsibility of your new neighbors comes into play. Seriously... if you are buying a condo and your neighbors in the building are behind on their homeowners' association fees, you are out of luck. Additionally, parents are no longer allowed to cosign for a child as they were in the past. Hardly seems fair, but banks are concerned about the bottom line now, no matter its disappointing ramifications for the soon-to-be-homeowner.

Guess who doesn't qualify? Me! I understand, considering my lack of full-time employment within the last year. It doesn't matter that I am making enough money now, it matters that I wasn't last September. So am I shit out of luck, as the saying goes? Luckily, no. Apparently, these days, you just have to be creative as far as securing the funds for your new home.

After talking to a banker, we figured out a way for me to secure a traditional loan (as opposed to a mortgage) with the same payments as a mortgage for the next five years. After five years (or sooner, if my personal financial situation becomes more secure in the next few years), we look into 'refinancing' and making a new advantageous solution. I had to settle for a slightly higher interest rate, but it does not make a huge addition to my monthly payments.

So don't be discouraged, soon-to-be homeowners! It might be a little more difficult and you may need to jump through a few more hoops, but securing financing for your new home is not impossible.

My biggest piece of advice is to keep meticulous records... recent pay stubs, records of cash income, and tax returns. Boring, but necessary!