Fixed Rate Benefits: Rising Rental Rates

There is a good reason that the 30 year fixed rate mortgage is the most popular one. It provides consistency. No matter what happens, my mortgage payment will always be the same. The one exception is actually to my benefit. If rates go down (though I doubt I will ever see them below what I have) I can refinance. On the flip side, rent can go up at any rate (Chicago has no rent control to cap increases in rent). I just came across this article that says rent could go up 7 or 8% this Spring. I ran the numbers, and based on that increase to what my landlord is renting the unit out for, I would be paying the same amount for rent that I will be paying for my mortgage, insurance, taxes, and association dues combined. I know there are still all kinds of other arguments against home ownership, but from this small fact I am going to feel good that my monthly budget will be the same for renting vs. owning.

Flooring: Good news shot down

After getting a few surprisingly high estimates for refinishing my parquet floors I started researching what it would cost to install entirely new floors. As it turns out, not much more, and the work could be done in a day rather than 4. So last night I had someone come out to take a look and give an estimate for labor to replace the floors. This guy gave me the best news I had heard all day: I didn’t have to tear out the existing floors in order to put in new ones. Using a specific type of pad and engineered hard woods they would be able to lay the new floor right over top, saving me a lot of time and effort. I was very surprised at how easy it would be.

I’ve been able to sneak putting my own personal work into the place, but I know I wouldn’t be able to sneak in flooring guys without official approval, so I got the ball rolling by contacting the property manager. I told him what was going on so he could help me get scheduled with the building engineer to do the work. What response do I get? He tells me to review to “Remodeling Guidelines” in the association rulesand regulations which state that you need to allow 30 days for approval on all work. 30 DAYS!!!! The official rule states that this does not apply to work such as painting and carpets. Well the install sounds about as easy as installing carpet.

I sent him back a description of the work and we will see what kind of response I get. I’m really hoping it won’t be an issue. The work is simple, quiet, not messy, and can be completed in a day. Plus it is all happening inside my unit, and will enhance the value of my unit. How does any of this require the board to think about it for 30 days? This may be just my first of many run-ins with the board. Wish me luck!

Tearing Down Cabinets

A special shout out on this post to Chris Sullivan for his help in tearing down these cabinets. This is the change that I have been most excited about. The cabinets hanging down above the breakfast bar totally cut the kitchen off, drawing attention to its small size. With some creative use of a large screwdriver and a hammer, we were able to tear th cabinets down piece by piece. Left behind is the support structure that was holding the cabinets up (previously hidden by wood paneling) which I will cut back and use to create the soffit (what I was previously calling bulkhead). Removing the cabinets made a big impact and I am very happy with the results. Check out the before and after below:

Work Has Begun!

Closing is done, the place is legally mine, and I have started putting in the hours on my new place. Forgive the lack of post on closing, mine was surprisingly uneventful. I was in and out in less than hour. Signed a bunch of papers, gave my check, got my keys and was on my way. I have been up to the place very night except Tuesday when I was held back by the third largest blizzard in Chicago’s recorded history.

My focus to being has been on getting my trim, molding, and doors painted. It takes a lot more work than just painting though. I’m not sure if it is because it is really old wood, the guy before me did a really crappy job painting, or a combination of both, but the surface is really uneven with some major glob spots. I have to spend a lot of time sanding to get the boards ready for painting. It is difficult because I have to be careful not to sand away the intricate details. As a result there are definitely some areas that aren’t so smooth, but we will just say they add character.

For an example of how the painting will impact the look at my place check out the one completed area below. This is the bathroom door. It took a couple coats to get it covered, so I showed the intermediate step. I need to do a bit of touching up (white paint spilling onto dark blue is really noticeable!), but this gives you the idea.

For the rest of this weekend I have a few goals:

1. Tear down the cabinets above the breakfast bar. I already have the wood panelling exterior off, and have help coming in today to help get the whole thing down.

2. Wire up a new cable outlet in the bedroom. Currently there is just one in the living room, but I can easily punch through the living room closet into the bedroom closet to wire this.

3. Complete sanding and painting the trim (okay, this might take beyond this weekend, but my goal is to have it done before my mom arrives on Friday!)

Video Tour: “Before”

Closing went smooth, and despite a blizzard, thunder-snow (which is awesome by the way) and unreliable public transportation, I have at least started work. I took a lot of before pictures, but those will be put to better use for before and after shots on single projects. Instead I have embedded below a video walk through of the place. It isn’t perfect, but gives  you a jist for the layout and certain thing I might be talking about as I put work in. Tow notes on the video: 1. Unless you love the sound of snow pants, don’t worry about audio; 2. I didn’t take a shot of the 2nd bedroom. Until I open up the panel above the door and get some lamps in there, the light is too low for my flip cam. Video below!

If you have any additional thoughts on interesting improvements let me know in the comments!

Already Butting Heads

It is still four days before I close on my condo and take official ownership, but I am already butting heads with the condo association and building management (I think I already mentioned by prediction that I will be fined in the first 3 weeks of ownership. If not, you read it here now). For a glorious brief moment this morning it looked like everything was going to work out perfectly. My closing is still on for Monday morning, and I got the whole day off because I was able to book a plumber and a guy to look at the floors for the afternoon. Too perfect!

Then came the issues. There was a note in the initial bid from my plumber that the building engineer would have to turn off the water to the unit in order to complete the work. Makes sense. They need to replace a valve to get the hot water working properly (and they even figured out a way to do it without punching through a wall!). So knowing the officially rules and processes I call the building engineer to get everything scheduled. Here is where I hit my roadblock. Apparently the water cannot be shut off for just my single unit (my punishment for buying in a building built in 1896), but the water has to be shut off FOR THE ENTIRE BUILDING! This means residents need to be warned and scheduling the shut off has to be coordinated with the coffee shop and bar that reside below our first floor. To handle this the engineer tells me to call the off-site property manager.

So I call and leave a voicemail for the property manager. Later I get a voicemail back (thanks to my phone that turns itself off, thus me missing his call). He tells me how my association has strict rules for remodeling and he can send me a copy of the rules to review, and blah blah blah. So I called him back, and unfortunately got his voicemail again. I hopefully made it clear that this is certainly not a remodeling issue. I’m not moving my bathroom or installing some new fancy shower head. I just want a plumber to be able to replace a valve so I can have actual water pressure when using hot water. I don’t think a small plumbing change in order to have a hot shower is considered remodeling. So now I wait again. I will probably have to cancel the plumber which is a huge bummer.

Thus begins my adventure of being a home owner!

Refinishing Furniture

Loan is approved, and though I don’t get access to the unit until after closing early next week, that doesn’t mean I can’t start working on planned projects. The first project I have tackled is refinishing a piece of furniture I inherited from my grandmother. The piece is actually really cool. At first glance it looks like a standard wood storage unit with cabinet doors and a drawer, but this one is actually a bar. It can roll on wheels hidden underneath the piece, and on top two panels fold out from the middle creating a larger surface for serving up beverages. It looked great when I rolled it into my current apartment, but with the direction I am going with my new place the original golden/light brown finish wasn’t going to do. So I set out to give the piece a more vintage/rustic look to fall in line with my intended condo theme of “Modern Vintage Fusion.” Check out the before and after below, followed by some notes on my process.

Let me tell you the first mistake I made with this piece… I tried to sand the whole thing by hand. I tested my process on one side panel and quickly discovered hand sanding was not going to suffice. I headed out in the single digit temperature to Home Depot to pick up a sander. I found a good one that with multiple attachments can be an oscillating, random orbital, or detail sander. Very economical if I do say so!

Articles I read online said to use a random orbital sander so I tried that attachment first. Unfortunately I could tell that was making swirls against the grain so I switched to the oscillating attachment to sand only with the grain. The sanding could have gone pretty quickly, though I took my time because I felt like the noise was going to drive the people that live below me completely nuts. Some of the smaller details such as knobs and the curvy areas on the drawer and door fronts were definitely tricky. I made heavy use of the detail sanding attachment for those parts.

One issue was the sanding was I wasn’t sure how much to sand. Was I supposed to get down to completely rough wood? It took a lot just to get through the original finish. I pretty much got the finish and went a little deeper, but I definitely did not completely remove the original stain. Unfortunately there were some areas on the flat top surface that already had some wear, so those spots were completely bare after sanding. This left a few extra dark spots in that area.

One thing I should have realized when I started staining was that stain is not paint. I bought a black stain, and, in my mind, thought I was going to end up with a black, or near black piece of furniture. After putting on the first coat of stain on one section I admired what I thought would end up a great dark piece of furniture. Reading the directions on the can quickly revealed that you are NOT supposed to let the stain dry. You leave it on for 5 to 15 minutes to let the stain penetrate the wood, and wipe off the remainder. As I wiped away the remainder on the first coat I got nervous. It didn’t look like there was much of a difference. I wondered if I didn’t sand enough or leave the stain on long enough.

I pushed through, and after letting the whole piece dry over night I added a second coat of stain the next day. This time I left the stain on longer (I had tested a back corner of the piece to test the night before). Although I didn’t end up with the really dark piece I initially planned, I think I ended up with a happy accident. The varying depths of sanding resulted in a worn, uneven look that I think gives the piece a lot of character and age. It no longer looks like it really goes in my current place, but I think it will look perfect in my new place once I get in there and paint and refinish the floors.

This first project was definitely a learning experience in planning, patience, and setting expectations, but I look forward to doing more. I love seeing the before and after and see what I actually accomplished!

Finally Approved

After more than 4 weeks and more than 30 documents covering the most intimate details of my financial life, I am finally receiving something in return, a mortgage! Normally someone being excited about their mortgage is a strange thing, but it took so much to get through the process that I am genuinely happy to be finally approved. There were a lot of scary times in there where I started to seriously doubt if I would be approved or not. The process definitely took a lot of effort and creativity. I will impart some of my greatest wisdom when I post my top 10 tips for buying a home young.

The best news now is that I get to really put all my focus onto the work I am going to do on my place. The extra good news there is that my blog is finally going to get really interesting. If you are tired of just reading my words, finally things will get exciting with lots of pictures. I am going to do my best to at the very least document before and after photos of my projects, and maybe photos of some intermediate steps too. I actually might take on a project this weekend even though I can’t get into my place. I am going to refinish a piece of furniture I have. Could be interesting.

Other than that, my tentative scheduled closing is for the 31st, but I now need to get confirmation on timing from my attorney. Hopefully everything works out timing wise, and I am ready to become a home owner in just over a week!

Happy Friday everyone!

Happy New Year to my Mortgage Approval

The last week of 2010 when things should be calm and easy between Christmas and New Years were anything but for me and my arduous process of getting my mortgage approved. I was being asked for proof of even more accounts that I have paid regularly (of which I had already reported all I could think of) and I was informed of the “Counseling” I would need as discussed in my previous post. Enter 2011 and things are looking up!

The first piece of good news is that they are finally done asking for new accounts. I must have frustrated them so much with attempting creative solutions that the underwriter finally said he or she would just accept what was already submitted. That was a huge weight off my shoulders. As I mentioned, I had already submitted all accounts I could think of, and I was starting to fear this might be a roadblock to me getting a loan. Suggestions for any young first time buyers out there, take the responsibility of bills if you are living with roommates. For some reason it seemed strange to them that I never had any utilities in my name when I lived in California, but each place I lived I was with several roommates, and someone else’s name was on the bill.

The second piece of good news was related to the counseling. I had basically email bombed any reasonable agencies that could do this for me in my local area to find one as quickly as possible. After the first of the year I started getting a variety of replies ranging from questions about the exact type of counseling I needed for my loan (I gave them the term I was given by my lender, but apparently that isn’t universal), to outright denials. A few places were just completely booked up helping people with foreclosures and therefore couldn’t take me. I took my concerns back once more to my lender, and after asking around a bit, he finally found an online course and test I could take to get my certificate. Still not thrilled I had to complete that step, but at least I didn’t have to spend hours with some strangers redoing several steps I have already completed. The online course was really easy. I read through their material quickly once, took the test, and after less than an hour total time investment, I got the prize:

So with this glorious certificate in hand I am just two easy pieces of paperwork away from loan approval. PHEW! I have spent so much time thinking about all this crazy mortgage stuff, and fearing I wasn’t going to get my loan, that I stopped looking at things I need for, and to use to work on, my new place. I’m back to the drawing board and brainstorming. Expect a few ideas to start popping up here in the next few weeks as I close in less than four!

I Need Counseling

Catchy headline right? Wondering what’s wrong with me that I require counseling? Fortunately it is not the kind of counseling you are thinking of, unfortunately this counseling is required. I just got an e-mail from my lender telling me that he “just found out” that since I am a first time buyer with limited credit history I need to complete a Home Buyer’s Education Course through the U.S. Department of Housing and Urban Development.

This has me really frustrated. First of all, I like that I have been talking to the same lender for over a month now, and this is the first time this comes up, even days after the first pass through underwriting (a few additional documents were requested, but no major issues). Second, while I understand given the recent housing crisis the government and lenders are concerned, I don’t think I need this. Clicking on the link to find a local office where I can complete my “counseling” all of the information is for people in trouble. It’s directed for people behind on payments facing foreclosure. Definitely not me.

Before I go to my counseling session I am supposed to gather all important documents so they can help me prepare for applying for a mortgage… oops, I already did that when I actually applied for my mortgage! We also get to do fun things like going over my typical monthly expenses so I can create a budget that will help me afford my home… guess what, already done again! I wonder if I can just send these documents in over email, sign a document that says I am an intelligent individual who understands what is happening, and get my certificate of completion. Yes, apparently I will be receiving a certificate of completion. I wonder how mad the counselor would get if I included buying a frame for my certificate in the budget portion of the counseling.

Apologies to anyone who finds this a little whiny. I’m writing right after I received the email so I’m still reacting to the whole thing. I see the merit, just not for me, and not so late in the game. If this holds up closing in any way expect a much angrier post. At least when I complete the sure-to-be-fun counseling session I can write an entertaining recap here.

Has anyone else had to complete a HUD Counseling session? Any thoughts on what to expect?