Article By: Jim Porter – June 9, 2023
Mary and I were very happy raising our four kids over on the South Side of Vacaville, and our family was proud to be Will C. Wood Wildcats. Over the years, I was often teased about how the weather was better on the North Side and the Vacaville High School record for sports was superior to Wood.
Hogwash I say, but for the second- and third-generation Vacavillians, this is what they believe, so let’s go along with this myth. Let’s say a very proud Vacaville alumnus bought her first house in 2011 right around the corner from Will C. Wood High School. She bought a 3-bedroom 2-bathroom 1100 square foot foreclosure. The seller did not have any pride of ownership and the house was a mess, but at $175,000, this was all she could afford.
In 2016, during Brexit, she refinanced down to a 4.5% fixed rate loan for $250,000 and pulled out $100,000 in cash to remodel the small kitchen, bathrooms, replace the roof, and paint the house. She was conservative and careful not to over-improve the home with million-dollar custom-home type appliances, windows, and floors because she knew this was not her forever home.
As her kids are approaching high school age, 2020 rolls around and she is financially ready to move up to her dream home over on the Vacaville High side of town and then the pandemic hit. Her three daughters, 8, 10 and 12, are excited about their oopsy daisy little brother coming in June. Little Joey is born healthy and after 90 days of maternity leave, she postpones moving up because of the lockdowns and her kids all schooling via Zoom.
She jumps on the REFI band wagon and refinances her loan, that is now $235,000, down to 2.75%. Her house payment, including taxes and insurance drops to only $1,190 per month. She is in “fat city” financially but now in June 2023, her parents want her to move over to the North Side, her three daughters, now 11, 13 and 15, are squabbling about the one bathroom they share and are constantly making a mess in mom’s tiny master bathroom, not because they are spoiled rotten brats, but simply because they have outgrown the home.
This woman can easily qualify to sell her remodeled house for $560,000 and move up to an $800,000 house on the Northside or keep the old house as a rental and buy up to a max price of $700,000 but she hasn’t because she is now addicted to the $1,190 per month. She also remembers 2020 and 2021, when she heard sellers would never accept an offer contingent upon the sale of a buyer’s departing residence and this makes the move sound stressful.
Mortgage rates are higher than her once-in-a-lifetime 2.75% and this makes her pause, too.
Things have changed, some sellers will accept a contingent offer and give a buyer 21 days to get their home sold and we have no shortage of bridge loan money and creative financing options available also. Hey, you Bulldog, get tough, call a local REALTOR and a local loan originator and at zero cost, have your goals and dreams analyzed and look at your options. If you don’t you will all be Wildcats for life.
Marry your forever home and only date the rate because all the experts say another REFI mania will be coming in the next year or two and even if it didn’t come, you can afford it and you need a bigger house because the kids will only get bigger and louder.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
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