This week I’ve spent considerable time on fun stuff--working on a cohesive color scheme for the house, poring over the internet and shelter mags for inspiration, researching products and sources, and generally having fun with the process of making this place ours. We’re going to start with our living/dining room, and I’ve decided to join in the fun over at the One Room Challenge, an online event where designers and bloggers are challenged to transform a room in 6 short weeks, chronicling the progress via instagram and a weekly blog post. There are so many great spaces, in all styles and budgets, so if you’re looking to fluff your feed with some eye candy, give them a follow! It starts next week, and I’ll be sharing our plans for the living/dining room then.
But enough about fun stuff for a minute! Today I wanted to discuss a few less sexy, but vitally important tasks we undertook upon moving in last October, that were fairly large investments, and the reason we haven’t done much in the way of cosmetic upgrades until now. If you’re considering buying a house that needs work, this post will hopefully give you some solid information about the process.
Last week, when I wrote about our home buying experience, I mentioned that there were several times we thought the whole deal was going to fall through. This had mostly to do with getting approved for a mortgage and finding an insurance company willing to cover us. Luckily, we had an experienced mortgage broker and we were longtime home and auto customers of our insurance company, Amica, and after much hemming and hawing and hand-ringing, they finally approved us under the condition that we do repairs immediately upon moving in.
From most of the pictures I've shared so far, she doesn't look that bad. But believe me, she's in rough shape:
As an aside, when we were first shopping for mortgages, we looked into the FHA’s 203k program, which is specifically for properties that need rehabilitation and renovations to bring them up to code. In this type of loan, the costs to fix up the property are rolled into the mortgage. The idea is to help someone buy a distressed property and renovate it, therefore helping the homeowner and by extension, the whole neighborhood. It’s a fairly complicated process; you need to find a mortgage broker participating in the program (there was only one in our area) and an approved contractor to do the work (also hard to find). The one bank I did talk to said we didn’t qualify because our “pay stubs don’t match our tax returns”, even after I explained that was because part of Frank’s income is in the form of tips. Our income was accounted for, it was just in two different boxes on the form but apparently that was too much work for them. Long story short, it was a dead end.
I knew the house wasn’t a horror show, but there were a few things that definitely needed to be taken care of first for me to feel safe with a toddler and two mischievous cats living there. Our mortgage broker, Steve, whom Frank had worked with before on our old house, had an idea. He asked us if the house was “habitable.” In Massachusetts, that essentially means the house has working plumbing, water, and no structural issues, insect infestations, etc. It’s a fairly low bar, actually, haha. The house was also on city water and sewer, so we didn’t have to worry about Title V, which regulates septic tanks and basically states that a property isn’t habitable if there are any issues with the septic system.
We told him, yes, the house met the definition of habitable. He suggested we apply for a standard (non-FHA) mortgage, and do a minimum 3% down payment. Not ideal, who wants a bigger mortgage payment? But this would allow us to buy the property “as is”, and also free up cash to handle a few things right up front so we could move in and not feel like the house could catch on fire or a tree could fall through the roof at the first winter snow. And hopefully allow us to get an insurance policy. As for the income verification, he took the time to ACTUALLY LOOK at our paperwork and could see that we had the money we said we did. Phew!
Next, we had to convince Amica to insure the property. We submitted the home inspection and let them know we had money set aside to replace the electrical panel, take down a tree branch hanging over the roof, and remove the water-damaged wall panels in the basement. Different people kept calling us back every few days to ask the same questions over and over and then say “I have to send this back up to under writing for approval…” After about 3 weeks, we started to panic. What if we couldn’t get insurance?! No insurance = no mortgage = no house. And we were scheduled to close and move out of our old house soon. FINALLY, they approved us, under the condition that we make the repairs and send them proof (photos, building permits, etc.). Phew #2.
So one, two, skip a few to actually moving in! Here are the things we handled straight away:
Ordered new appliances (because #priorities)
Replaced the Federal Pacific electrical panel and upgraded to 200 amp service
Removed a tree branch hanging near the roof*
Sealed the leaks in the basement; removed some water-damaged material
Hired an exterminator
My blood pressure went down about 50 points after our electrician replaced this scary and defective electrical panel!
And the After (those scraggly wires on the left are from the old telephone wires, and no longer in use):
And our lovely basement, the day after we moved in. Happy to report we haven't had water since we sealed the cracks (fingers crossed it stays that way).
Now that it’s spring, we’re going to focus on repairs to the exterior. This week we had a painting contractor at the house, and once the weather is decent we’re planning to have it power washed, scraped, and repainted. I really can’t wait, she’s going to look fabulous with a fresh coat of paint. Happy Friday!
*As luck would have it, the largest tree branch of concern actually fell onto the roof about 3 weeks before we closed after a storm. The sellers had it removed, fixed some minor damage to the fascia, and sent us the receipt for the repairs. They also had the chimney repointed.