Car troubles

Amy and I share one car. This is rather convenient, since with both work at home and rarely need to travel to separate destinations on any given day. However, as of recently our car has been giving us a great deal of grief. It all started with a "Check Engine" light back in the November. I brought it into the shop to get a pre-inspection tune-up so it would pass the MA inspection. They managed to get the check engine light to go out, but the car would not pass inspection. We returned the car to the shop and had more work done on it and it still wouldn't pass. Turns out the inspection station could not get a reading from the car's computer, yet our shop says they can get a reading from it just fine. In addition to this, the check engine light keeps going on intermittantly. After about four trips to the shop and an equal number of trips to the inspection station, we are at our wits end. We can't afford to put any more money into this 1996 Hyundai Elantra.

We are currently driving our wounded Hyundai without a valid inspection sticker. We have no choice. This past weekend the car started rough idling and getting performing poorly. I took a look at it today and it appears that cylinder #4 isn't firing at all. That's just great! I don't think our Korean wonder has much life left it in.

So, here we are about to buy a house and are already being stretched thin financially and we have to figure this damn car thing out. We also need a car with a trailer hitch so we can pull our trailer full of goodies to the new home. Fortunately, a quick search has turned up a suitable replacement: A 2002 Hyundai Elantra with 55K miles which is located less than 5 miles from our current home. It's not the best time to be spending money on a car, but we are pretty much stuck. We need a car, we can't afford to put any more money into this one, and we can't afford to wait. So we're just going to have to bite the bullet and go over-budget and pray everything works out. I am sure it will. •

Posted by: Sheldon Finlay on Feb 26, 06 | 7:35 pm | Profile

Moving along

It is really amazing to me how fast and smooth this whole house purchase is going. I expected the whole process to take months. It's hard to believe that we set forth on this pursuit on Valentine's day and here we are just a few weeks away from moving in. Things are moving along so fast that we are actually considering closing earlier. Perhaps by mid-March instead of late-March. That would give us more time to make some changes before we move in.

This past week we met with a mortgage lender at People's Bank. The whole experience was very pleasant and we locked in at a very good rate. People's Bank is known for having the lowest rates around and beat our CountryWide mortgage rate by almost a whole point. The application went very smoothly. Given that we're both self-employed, I figured things would be a little more difficult. But the person we met with said our income was very stable and was well suited for this home and we shouldn't have any problems. Now we just wait for the bank to commit. But overall, I am sighing a great relief given that the financing is pretty much in the bag.

On Friday, we got to visit our property for the second time in order to accompany the house inspector around the premise. On this visit an odd thing happened. The place seemed to shrink in size from my memory of it the first time. Both Amy and I experienced this. Very interesting.

The inspection was very thorough and the inspector was great. He was a seasoned contractor and knew exactly what to look for. Overall, he gave the place a very good rating. There were a few minor electrical considerations (non-GFI receptacles in bathroom and kitchen, missing water ground, etc.) but nothing critical. We talked with the Realtor and agree that we should have the seller bring an electrician in and make these quick adjustments. He did make some general homeowner suggestions such as weather-sealing the deck and blowing more insulation into the attic. Not really faults, just common sense improvements.

In addition to the inspection we are also getting the well water tested and having the basement tested for radon levels. The house already has a radon remediation system so radon shouldn't be an issue, but it will be nice to know for certain. The bank also requires the water test to be satisfactory in order to approve the loan.

So things are moving along nicely. I did take some photo while I was there and I am debating whether or not I want to post them online yet. We'll see. •

Posted by: Sheldon Finlay on Feb 26, 06 | 1:00 pm | Profile

The FACT Act: Get copies of your credit reports online for free

It's been a few years since I cared to peek at my credit reports with the major credit reporting bureaus, Equifax, Experian, and TranUnion. But since I am going up again mortgage lenders, it's probably a good time to ensure everything is in apple pie order. The law used to require credit reporting agencies to provide a free yearly copy of your credit report upon request. This only applied to a dozen or so states, Massachusetts included. The last time I requested my credit report I had to call each agency and go through a fairly lengthy automated verification process before they would send me a paper copy by mail which would usually arrive a week or two later.

Yesterday, while doing some credit reporting research I found out about the FACT Act (Fair and Accurate Credit Transactions Act). Basically, it entitles everyone, regardless of state, to receive a yearly copy of their credit report. This is a fairly recent law which went into effect on December 1st, 2005.

Thanks to a website ( https://www.annualcreditreport.com/ ) which was recently created by the top three reporting agencies, one can quickly and painlessly receive copies of their credit reports online from all three agencies. Each agency will attempt to sell you other things such as credit scores and debt analysis and credit report monitoring, but you can deny these additions.

I now have all three credit reports saved and printed out. And I am pleased to report everything looks better than I had expected.
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Posted by: Sheldon Finlay on Feb 21, 06 | 11:10 am | Profile

A home in the woods

Amy and I had a pretty good idea of what we wanted in a home. We knew we wanted a reasonable size home with 3 bedrooms (One for ourselves, one for our home office(s), and one for a guest room). We both like to garden and work outdoors, so the land needs to be fairly open and workable. The house itself needs to be charming, spacious, have a large living room and be inviting. We didn't want a ranch or a split-ranch, or any house born out of the post-war baby-boom. An elegant farmhouse would be nice, if it was well maintained and insulated. My favorite New England style home is a Victorian or a classic Colonial Saltbox.

Last week, after securing the promise of financing, we choose a Realtor to represent us as buyers. Our Realtor's search system provided us with addresses which many Realtor's don't offer unless you call them and ask for them. So, before we went out with the Realtor we narrowed down the list of suitable properties tremendously by visiting Google maps, plugging in the addresses and studying Satellite photos of the house and surrounding properties and landscape. I know, I am such a geek. But, hey, it saved us visiting all the houses located on busy streets, in packed neighborhoods, or without open land.

On Saturday our Realtor picked us up and drove us through the Belchertown properties we had selected. The first few were okay, but they honestly were not much better than the apartment we live in now. And none of them had a shred of land for a garden. There was one house which I was very excited about just from the listing sheet and when we finally saw it it appeared to have all the variables: one acre of land, quiet wooded location, large family room, full sun exposure with the house facing west, large windows on all sides of the house. The place was perfect, after two walk-throughs and a trip around the yard we were hooked. We saw one more property after that and headed home.

One Sunday we were supposed to go with the Realtor and visit some properties in Deerfield, Conway, Northampton, and Easthampton. But Amy and I decided we were ready to make an offer on the place we like in Belchertown. We filled out the paperwork with the Realtor, wrote out a deposit check and left for the Vermont Sunday sing hoping for the best. While we were singing the Realtor left a message on Amy cell saying the owner's offered a counter offer. We accepted their counter offer, they signed the purchase agreement and now it's a done deal. Hurray! Our Realtor was awesome for pulling this all off during a Sunday. And her agency isn't even the listing agency for the property. She's the best!

We still have to get the place inspected and have already booked an inspector to come out and check the place over. We also have hired a lawyer to do the deed work and whatever else lawyers do during house closing. And of course, we also have to finalize our financing. My accountant called me today to let me know what the final income numbers were and how much we tax owe (ouch!). But if all goes according to plan, we will close on March 23rd and will be having an official moving day the following Sunday, the day after the Vermont State Convention. We are keeping our fingers crossed that everything works out. •

Posted by: Sheldon Finlay on Feb 20, 06 | 1:36 pm | Profile

Funding our new crib

Our overly salesy mortgage broker called us yesteryday and informed us that due to our "success as self-employed business people" and "our outstanding credit" and "our smart financial decisions over the past few years", we are pre-qualified for a mortgage large enough to afford a decent home. Hooray! Thanks be praised! This is a great relief. Now, pre-qualified is different than pre-approved. Pre-qualified means that based upon what we stated as our income and downpayment, we qualified for x amount of money at y interest rate and with z dollars down. Now, in order to be pre-approved we have to back it up all with tax returns and bank statements, which shouldn't be a problem. Surprisingly, they only need 6 months of financial info from us. I always heard that the self-employed usually have to fork over at least 3 years of stable financial info. This wouldn't have been a problem, just more work for us.

Upon learning of our pre-qualification, Amy and I went over the numbers and attempted to add up all our monthly expenses and monthly income qnd figure out where we'd stand after taking on a mortgage. We factored in the monthly mortage payment, taxes, insurance, PMI and all the other hidden fees. Holy smokes! It certainly adds up quick. Our housing costs will nearly triple over what we currently pay for rent. And our rent isn't cheap (3 bedroom duplex 10 minutes from downtown Amherst). But we should be able manage and we decided that we will work hard to make larger payments towards the principal in attempt to pay the loan down faster (savings of thousands and thousands and ten times thousands of dollars!). We probably won't be flying down to Alabama anytime soon.

Now we begin the process of looking at properties and making offers. Happy Happy Joy Joy. We may also shop around for another mortgage offer. While the mortgage we're pre-qualified for is decent, I would like to see if we can get an even lower rate. Even a 1/4 point on the interest rate will save thousands over the life of the mortgage.

Mortgage Word History

The great jurist Sir Edward Coke, who lived from 1552 to 1634, has explained why the term mortgage comes from the Old French words mort, “dead,” and gage, “pledge.” It seemed to him that it had to do with the doubtfulness of whether or not the mortgagor will pay the debt. If the mortgagor does not, then the land pledged to the mortgagee as security for the debt “is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the [mortgagee].” This etymology, as understood by 17th-century attorneys, of the Old French term morgage, which we adopted, may well be correct. The term has been in English much longer than the 17th century, being first recorded in Middle English with the form morgage and the figurative sense “pledge” in a work written before 1393.

Posted by: Sheldon Finlay on Feb 16, 06 | 9:24 am | Profile

Some girls want diamonds.

For Valentine's Day, Amy said the most romantic thing I could do for her would be to walk into a mortgage broker on that day and get pre-approved to buy a house. She is so easy to please. You want a house, honey? Sure, why don't we buy two while we're at it? So, this past weekend I mustered all my clerical strength to bring my books update, summon my 1099-miscs and other frightful tax instruments, and prepare a nice parcel of tax mayhem for my accountant to deal with. Figuring out how much money you make is the first step in getting a mortgage I hear.

And speaking of money, getting a mortgage is not an east ordeal when you work for yourself. For some reason banks loathe the word "self-employed" almost as much as the word "unemployed". They won't talk to you until you earn a gazillion dollars a year or have a massive downpayment. Unfortunately, I don't earn a gazillion dollars a year. However, I've been saving my pennies for the last 5 years and probably have enough money saved for the bank to give me at least the time of day.

So Monday, we called a mortgage broker and went through some numbers over the phone. Amazingly, they didn't immediately burst into a cacophony of laughther and hang up the phone on us like they had done all the other times. That's a good sign, right? We didn't get any immediate response, so it seems somewhat hopeful, too. No news is good news. So, we're just keeping our fingers crossed awaiting their reply sometime tomorrow. We promised ourselves we wouldn't search Realtor.com for house listing until we got pre-approved. But Amy's will is weak and she already made a list and forced me to look through it with her.

I shouldn't have looked! Buying a house in this market quite intolerable. You can barely get a decent house for $300K. When I first moved out to this area in 1995 decent homes went for around $150K. It's not fair. All we want is a secluded and private antique farm house (or a quaint victorian - we like old homes) with enough land to have a garden and a living room large enough to host a sing. And it should be located within 25 minutes of Northampton. It should have all those things houses come with like a bathroom and a few bedrooms and a kitchen and some doors.

So, tomorrow we'll see if we get the Valentine's day sweetheart or heartbreak (or the "we need more tax documents carnation bouquet"). •

Posted by: Sheldon Finlay on Feb 13, 06 | 11:23 pm | Profile

Our Own Private Cave

Coming home from the Sunday sing / Board meeting we turn into our dirt drive (which we share with some neighbors) and we notice a box in the middle of the driveway. Hmm, I think, it must have fallen off some passing vehicle. So I swerve around the box, stop the car, and get out to deal with the vagrant box. Upon removing the box I immediately find out that this box is no ordinary box. This box has a purpose: to cover the gaping sinkhole that somehow magically appeared in the middle of our driveway. It takes me a moment to figure out what I am looking at: a hole in the dirt driveway approximately 12 inches across which goes down about 5 feet. I remove my cellphone and use it as a flashlight to illuminate the hole. Not only is it 5 feet deep, but it opens into what appears to be a vast and cavernous area (from my vantage point you could probably fit a person in the space. Heck, it could be huge. I can’t see how far the void extends). This is so cool, my very own Lewis and Clark Caverns right here in the middle of the driveway. Suddenly it dawns on us: Is the ground we’re standing on safe? Looking into the sinkhole I could clearly see that the ground above the cavernous opening is roughly 2 feet thick. I should probably refrain from jumping up and down in delight. We mark the hole with a couple of orange street cones and call the landlord.

This morning we went for a walk to visit our favorite sinkhole and check to see if it caught us any UPS trucks. But to our surprise it had disappeared! Someone (and not our landlord) had filled it in with sand. Our landlord believes that there used to be a large maple tree in that location which was removed to make the driveway larger. Overtime, the stump and roots of this massive maple had decayed leaving a massive void which just decided yesterday to make it's presence known. I guess that would explain it (I had more fantasical ideas involving Indiana Jones, freedom seeking slaves, or pirate booty). I suspect that this is not the last that we’ll be hearing from this sinkhole.
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Posted by: Sheldon Finlay on Feb 06, 06 | 7:37 pm | Profile