Flip Thy House

House #2 = Closed

We closed on House #2 on Friday. I’d like to add “…and things went off without a hitch,” but that’d be a half-truth.

No hitches in the normal sense, as the funding came through fine, we signed everything, got the key, all that happy stuff. The hitch was that we got hit with 2.5% origination fee on the mortgage, which basically translated into me setting a little over $2,000 on fire for no good reason.

Before I launch into ranting and spleening, I’m ultimately to blame here, as I could have avoided this if I were more diligent (and had heeded a warning sign or two about the behavior of our mortgage banker in the past). The short version is that we ended up going with a slightly different loan product midstream, and I took Mortgage Guy’s word when he assured me it was exactly the same as the first loan that I’d gotten a good faith estimate for (which had a loan origination fee of less than 1%).

His only explanation when confronted with the fact that I most definitely wasn’t expecting to pay a 2.5% loan origination fee was that such a fee was standard for loans for investment properties, as the potential for the property to be flipped quickly makes it necessary to charge a higher loan origination fee to protect a profit for the mortgage lender. The only problem with that is the first loan we were going with was for the same investment property, yet it had a much more reasonable origination fee. An additional problem with that explanation is many lenders chare very low origination fees (or none), as their real profit apparently comes from marking up the loan when they re-sell it.

Lesson learned, as far as taking his word on it and not insisting on seeing all of the fine point before it was too late.  I didn’t make too much of a stink at closing, as Mortgage Guy was there, as it was past the stage wheremaking a stink could cause anything constructive to happen, but I’ll be damned if he gets a penny of my business moving forward. If I had no other options when it came to getting a loan, that’d be one thing, but with our credit scores and general income/savings, it’s pretty ridiculous to get bent over like that.

In happier news, I did get to knock around in House #2 this weekend, and everything so far has been good news.  I knew the hardwood floors under the carpet were in good shape from peeling back carept where I could, but I was pretty amazed when I got in there after closing and was able to really rip back the carpet. I’m not even sure they need refinishing, as they’re mainly just dirty, and it honestly looks as if the hardwood floors were installed then immediately covered with carpet, 50+ years ago. They didn’t even use carpet tacks to install the carpet, as it was just sitting loose on top of the floor and only held down at the perimeter by shoe moulding and tape. Worst case scenario is that they just need screening with a floor buffer and sanding disc, which potentially saves me a whole ton of labor and expense.

I’m probably going to need to replace all of the windows, though, as they’re in rougher shape than I’d thought. The finished product is going to be on the mid/high end of the range of homes here, and I think new windows is pretty critical, aside from just the aesthetics.

Still not sure about a few details, especially where the bathroom addition should go.  I’m trying not to get too bogged down in those details at the moment, as a lot of the plans will depend on talking to contractors over the next few weeks, as far as firming up plans, seeing what’s possible, yada yada yada.