Oh, The Irony of It All

May 19, 2008 · 0 comments

As I mentioned in my last post, the fiancee and I headed to Atlanta on a house-hunting trip a few weeks ago…while I would like to say that is was just a stress-free trip to just look at some houses and relax for the weekend in our soon-to-be hometown, it unfortunately wasn’t…

You see, as soon as we found a real estate agent a few weeks back, I decided to ask the agent for a mortgage broker referral — while I wasn’t concerned about getting a mortgage, I figured it was better to get one lined up, get an application submitted, and get a pre-approval letter that we could show to the sellers if we found a house we liked. Well, soon after contacting the mortgage broker, we got some (almost laughable) news…

While I’m planning to quit my job to pursue real estate investing, the fact that I’m quitting my job was making it impossible to get a mortgage loan after I left my job. Despite the fact that both my fiancee and I have 15 year job histories making very high salaries — and the fact that we have more than enough cash in the bank to buy any house we wanted in cash — because of today’s strict lending environment, without jobs we couldn’t get a loan. While I knew that not having a job would likely hurt my chances of getting the best rate on a mortgage, I assumed that with a large enough down-payment and the cash we have in the bank as collateral, there would be some way to get a loan.

While depressing, I wasn’t going to let a little setback like this ruin my adventure. While getting a loan after we quit our jobs would be difficult, we had options. First, we could find a house and close on it before we left our jobs; this way we could still get a loan without too much trouble. This was our preferred option, and the reason why we felt our trip back to Atlanta was somewhat stressful — if we didn’t find a house to buy that weekend, it was unlikely we’d be able to close on something before we left our jobs, and we’d have to figure out a “Plan B.”

Our three best Plan B options were to either: buy a house for cash, have one of us get a job when we moved in order to qualify for a mortgage loan, or continue to rent until we had enough income from our businesses to qualify for a loan. While none of those options were optimal — we wanted to keep our cash for additional RE investing/reserves, having to get jobs would detract from our efforts to start our own businesses, and we really didn’t want to continue to rent — we at least knew that we had a backup plan, and decided to cross that bridge when/if we got to it.

With that in mind, we headed to Atlanta to find a house…

Want to know what happened? I’ll save that for my next couple posts…


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