First Time Home Buyers
In 1994, we set our sights on a house located in a pleasant, quiet suburban enclave called Bixby Knolls in Long Beach, CA. Although we could barely afford the home’s $230,000 purchase price – a fortune for us at the time - it was a small, neat, modest home situated in a good neighborhood with appreciation potential. So, we dove into the home buying market. It was a perfectly manageable house located in a perfectly acceptable neighborhood.
We did not have a clue at the time that home prices would slowly begin to climb and climb and climb thanks to an extended period of historically low interest rates. Low interest rates spurred consumer demand, which soon grew to overwhelming consumer demand for homes to call their own. Consequently, home prices reached stratospheric levels in our neighborhood as well as in most major metropolitan markets (Texas, Oklahoma, the Dakotas and a few other affordable markets being the exception).
Ten years later, in the middle of April 2004, a devastatingly tragic electrical fire took the lives of our beloved Italian Greyhounds, Ben and Rusty. Although we rebuilt our home better than it was before, it was still a sad time for us; we ultimately sold our first, “first home”. The offers made for our modest 1,600 square foot home were obscene - obscene amounts, that is. It was undeniably the most profitable yet most heartbreaking investment of our lives.
In retrospect, recalling the loan application process and qualifying for the mortgage in order to buy our perfect little house, well, we recollect that process was NOT so perfect.
In 1994, when we were struggling to qualify for the mortgage, we were not aware of available first time home buyer programs created for folks of low to moderate income.
Furthermore, our loan officer did not introduce us to these options, either because he was as clueless as we were about the existence of such programs or, the bank with whom he was employed at the time elected not to participate in specialty programs for first time home buyers.
Neither we nor our loan officer had any idea the city of Long Beach, county of Los Angeles and yes, even the State of California all had available specialty loan programs designed specifically for folks like us: first time home buyers, short on cash for a 20%, 10% or even 5% down payment, not to mention funds to cover closing costs.
We were wholly unfamiliar with mortgage credit certificate programs, below market interest rate programs, mortgage revenue bond programs, and we would have given our left arm for help with no-strings-attached gift money and forgivable grant money provided through city, county and state housing agencies.
If we only knew . . . the home buying process would have been so much easier and much less stressful. Driving our decision to buy a home we could barely afford was exacerbated by our landlord's demand we vacate the house, which was once rented by my husband and his former wife (the landlord's daughter), within 30 days. Great – no pressure there. . .
