One smaller mortgage payment, please

My last post gave you all the hairy details of our house aquisition last June.  This one is all about the way we worked the system like the Gosselins got a great deal on a refinance this year. 

Last year we refinished the living room/entry floor, removed miles of wallpaper, painted, painted some more, cleaned up the yard and added paneling to the dining room.  Even with all that, the place was looking pretty rough in January, and this was for a reason.  We wanted to get a city assessor in here to lower our assessment, and the soonest this could be done was the first of the year.  So...we left things looking like this to plead our case that the house was not 'worth' what we were paying taxes on:

 

Do you like how I hung a picture up to distract from the wallpaper that is still on the upper walls in the stairway?

Before this, I actually used to have a bunch of pages from the Victoria's Secret catalog taped on this wall because I thought seeing Adriana Lima in lacy panties would distract Shaun from my 'wallpaper picking'.  He thought it was stupid to pick off little pieces of wallpaper here and there because it made the house look worse, he wanted to wait until we were ready to do the entire project.  You can sort of see my handiwork in this picture:

         

My 'lingerie artwork' was up for a housewarming party we had, everyone thought it was hilarious.  Anyway, our plan to keep the house looking dumpy for the assessor worked, he lowered our assessment by 26k in April!  That would translate to a $566 annual savings if property tax rates remain the same this year, which I know isn't happening.  We will see what we've saved soon.   

After the city assessor left in January, we knew we were going to try to refinance because rates had dropped so much.  This meant we had three months to un-dumpify the house substantially to raise our value enough to avoid the dreaded PMI.  Our plan was:

Finish removing wallpaper in entry, stairs and upper hallway areas.

Prime, paint these areas including trim. 

Refinish stairs.

Change out light fixtures in entry, upstairs bath, downstairs bath.

Completely redo downstairs bath.

Stage the upstairs hall.
Stage the master bedroom and guest bedroom.

Stage the living room, dining room and two attached sunporches.

Pray that our city assessment didn't get lowered until after the refinance!

Happily, everything worked out and the credit union we worked with received the inspection report stating that the house was worth 20k more than our new 'lowered' city assessment, and 35k more than we purchased the house for last June!  Pretty sweet in the bad housing market, if I do say so myself.  We now pay $200 less per month after securing a 4.875 interest rate and eliminating the PMI we had been paying.  Plus, our property taxes will go down because we were proactive in getting our assessment lowered while we still had a chance.  Since we escrow, this means that hopefully next year our total payment will be even lower.  And our closing costs were only $1200 so we have already recouped those costs from our lower payments.  Woot! 

In closing, please check out this hilarious photo I took when we first saw the house.  This is the upstairs linen closet containing a bottle of olive oil, and a can of WD-40 for all your bathroom oiling needs:

                       

Other weird stuff the previous owners left here: a single (dirty) men's suit hanging in the master bedroom closet and a clean but taped-shut-like-it's-dirty diaper in the guest room closet. Wha??

How we started going steady with our house

It's a long story, like REALLY long.  So here's a little timeline for all those that are interested in our journey to home ownership:

March 2008 - I'm living in WI, Shaun is living in IL.  We decide that we are going to buy a house together in WI after almost three years of dating while living 65 miles apart. 

April 1, 2008 - I get us a buyer's agent and start pre-screening properties with her while Shaun is figuring out his work situation in IL.  His company (TJ Maxx) was very accomodating and he transitioned to a higher position when he came to WI.  It was a very nice thing.

April 12, 2008 -  I am discouraged (after only 5 days of looking, ha!) because there are so many boring 70's houses in our price range, and I wanted an older home with character.  My agent tells me that if we could go higher in price, she is listing an old house on a beautiful street that needs some work.  We go look at it and despite this

and this

We both really loved it.  Mostly, Shaun loved the deck over the garage, here he is seeing it for the first time:

April 16, 2008 - We put an offer on the house, however there were some big issues.  This house was listed by our buyer's agent.  You should NEVER write an offer using the listing agent since they are trying to make a higher commission on the sale.  I believe we could've gotten a better price, but she encouraged us to offer more because this was a short sale property.  We were told that because all short sale offers have to go through such a lengthy approval process with the bank, it would be better to offer a certain amount to ensure that they would accept it.  They accepted it 6 weeks later.  It was NOT FUN to wait, but now I wish we had offered less since it probably would've taken just as long to approve and we would've saved some cash.  Also, the house had been sitting vacant for over 9 months because all offers already made on the house had contigencies to sell their house, and were rejected based on those contigencies. 

May 28, 2008 - We finally hear word that the bank accepted our offer and we can pick our closing date.  Unfortunately, in the 6 weeks that the bank was 'approving' our offer, mortgage rates had gone from 5% up to the rate we locked at, 6.375%.  I am royally pissed.  We pick June 20, my birthday, to close. 

June 4, 2008 - Inspection.  The inspection goes smoothly, just minor issues except for water damage in the den area of the first floor, we ended up paying a separate 'water' inspector to check it out and it turned out to be old damage as opposed to a current problem.  Another $100 out the window. 

June 20, 2008 - We close on the house and immediately go to the rental place to pick up an orbital sander to start on our floors.  I discover the painted-over wallpaper in half of the rooms in the house.  Tears, curses. 

July 17, 2008 - I let my realtor talk me into buying a one year home warranty because all of our major mechanicals were 15+ years old.  She gets a commission on the sale of the warranty and we never once used it.  Tears, curses.     

 
Bottom line:  We got our house for 40k less than the assessed value and only paid half the standard PMI because we put 11% down and had excellent credit.  Plus, somewhere in the process we found out about the $7500 first time buyer credit, so we were really happy about that.  Early 2009 came and we saw the tax credit made one thousand times better by removing the repayment condition, and mortgage rates plummeted, so we scored ourselves a sweet refinance.  Too bad we couldn't have gotten the better tax credit, but we're happy we got anything at all.  More to come on the refinance later....