…continued from Friday’s post
Sweetheart’s lucky day came when her Aunt suggested that she refinance what was owed on the house and the renovation costs for a lower monthly payment. It was still sort of a long shot, because even going by the payoff on the mortgage, she needed more than it’s worth to fix it up. This is where having a good relationship with your bank and keeping your credit score up as high as possible really comes into play.
She talked to the banker she’d worked with her entire adult life, hoping for the best. Thanks to her just over 800 credit score, she walked out with a new mortgage with a lower interest rate, lower monthly payment, and the leftover money to bring the house to a livable condition!
It took three months for the house to be completed.
What Do We Learn from This?
This is just one scenario that demonstrates why we try to push everyone to have a great credit score. When the unexpected happens, it could really bail you out!
The Renovation Story
During the three-month renovation:
All of the wood that had mold growing on it was replaced. That is what took the longest. Most of the ceiling was covered in it, and the wood had begun to rot from the water. In a situation where mold has been allowed to grow and thrive for that long, that is really your only option. I know some people just paint over it and think that will smother it out and kill it.
Some paint brands claim to be able to kill mold. I don’t have any experience with those. There are ways to kill small areas of black mold. It is usually easier to just replace the areas where it is growing. You have to kill it, then remove it, then use a mold resistant paint ($$$) over that area, and hope that you got it all. A quick search on the internet showed MANY results on removal for small areas. I saw them all in agreement that just painting over it will not help it. I am so convinced in getting rid of it in fact that everywhere Rattlesnake had it was replaced completely. I personally would not have been comfortable with it just being treated and painted.
She put the house on the market for rent at $625/month and has had it rented out for just under a year now. She priced it to bring in $50/month extra that is put into a savings account for repairs only. She doesn’t see any of the profit, and won’t see any for the next 10 or so years when the mortgage is paid off. It was an incredible learning experience. She was fortunate that her parents instilled good money management and credit score awareness in her. Had she not had that kind of credit score, she would have had no good options.
Every day is a new day for the housing market. We rely on data and trends for as much foresight as we can get, but in the end nobody really knows. Educated guesses can be made most of the time. When deciding to take on a mortgage have an exit strategy in place just in case you need it. Something as long term as a mortgage can be a very uncertain thing when planning that far ahead. Be prepared for what could happen, and if something does happen that you are not prepared for, The Hermits will do our best to help you!