Chips, Dents, and Cracks

Wow, I got some of the highest page count number ever on my last post, so I guess interest rates and arithmetic actually are interesting to some people. Cool! But back to our regularly scheduled updates on repairs and remodels, for now.

When we remodeled our bathroom this winter, we went with a company that claimed to offer a "guarantee" of workmanship and said that we could call them if anything went wrong that could feasibly be their fault. They even warned us that the caulk line between the tile and tub might crack and to let them know if it did. And lo and behold, about 6 or 7 months later, this was the line. Note the slit running the whole length of the picture (but don't note that it's a little mildewy--I haven't wanted to scrub too hard and get water/cleaner into the backer board, so it's a little grimy).

Something that wasn't necessarily their fault but that was also bugging us is this little chip in our tub--see it all the way on the left?

We have no idea how it happened--neither of us remember dropping something onto the tub. But it wasn't there on our final project inspection, so obviously one of us must have done something stupid. Nonetheless, it took away from the whole newness of the bathroom. Also it made the tub look dirty because it looked more like dirt/grime then a dimple, so that bugged me too.

With the refinance finally behind us, we made time to contact our remodelers and ask them to come out and fix stuff. They were a little slow to come pay us a visit, but true to their word they did indeed come and not charge us (at least we don't think they charged us--no bill has arrived yet). They decided that instead of using the sanded caulk in light pewter that they had used before to match the grout, they would use something with more silicon that would be more flexible and less likely to crack. We were fine with that, since white silicon is what surround our soap dish, towel rack, and shelves anyway. So after about an hour of removing the old caulk and putting on new, here's the new view:

Notice that our tub chip is missing as well. This wasn't really due to our contractor. We had already purchased this stuff below and were just waiting to get both steps done together so that they would both cure at once when we switched to the downstairs shower for a few days.

It worked pretty well, as the picture shows, on the upstairs tub. So we decided to apply it to a chip in our downstairs sink that's been there from before we moved in. That, however, was not such a great success. I guess the porcelain is more of an off-white than white. You can see it in the bottom left corner of the picture below--a bright white spot that is much more noticeable than the chip itself (we forgot to take a before picture, but the chip wasn't black like the one in the tub--more like a yellowish dent).

Oh well, something we will just have to live with. Turn out that this stuff is pretty permanent. Guess we should have tested it somehow to see if it matched. Not that there are more color choices available anyway.

Un-interest-ing

I don't usually talk finances on the blog and prefer to stick to tales of home improvement and repair. But then, it's not everyday that we "rebuy" our house--i.e. refinance. The title refers to interest rates but also to the fact that this is one of my longer and more boring posts. Bear with me if it's not up your alley.

It's no surprise that we refinanced--after all, interest rates are at record lows and even though we didn't buy too long ago, we'll have significant savings with our shiny new rate.

There's a bit of a story to this refinance, though (isn't there always?), because it was actually our second try. About a year and a half ago, we tried and failed to get a new mortgage. It made me so angry at the time that I didn't want to vent here, but now that some time has passed and we actually did get through the process this time, I thought I'd share.

The problem was, as is probably the case with most failed refinances, that our house price had declined. We'd been owners for a little over a year and felt pretty confident that our area had pretty solid sales and prices, but the appraisal process didn't go very smoothly. Appraisers are selected at random and completely independent from the bank offering the new loan. Not everyone's application requires an appraisal, but if the sale is relatively new and not very much has been paid into the loan, it's pretty typical. These are pretty big changes from the last decade when I think all you needed was a pulse to qualify for a loan.

We had all our paperwork in and just needed to make sure that the home value didn't drop low enough that we wouldn't clear a 20% downpayment. Because even standard (non-interest-only loans) pay down very little principle upfront, after about 15-16 months we still had almost the same amount of principle paid as when we closed, so the house value had to stay almost the same for us to make our number.

Here's a math example, not using our real figures: Say we had a $300,000 house and put down our 20% of $60,000. We'd have a loan of $240,000. Then say our house appraises for $280,000--a loss of $20,000. When we try to refinance, we'd have to clear that 20% of the new amount, i.e. $56,000. 280,000 - 56,000 is $224,000. But after a year paying down our 240, we've still got a loan for, let's say, $234,000. We'd need an additional 10k downpayment to make up the difference between 234,000 and 224,000 to be at that new 20% point.

So, in a nutshell, we weren't there. Our house value declined about 8%, which would have meant putting down a significant new downpayment or incurring private mortgage insurance. We might not have minded, except that the appraisal (and appraiser) was a nightmare and we didn't feel like the number accurately reflected our home.

First, he decided that our 4 bedroom home only had 3 bedrooms. He told us there was a law on the books that said that a room with no closet didn't count as a bedroom. Fair enough--maybe. Except that he wasn't obligated to show us the law and couldn't demonstrate to us that we weren't "grandfathered" in (usually laws like this apply to homes built after the law passes, but not to older homes). Neither of our real estate agents had even suggested this was an issue (and ours was pretty good about pointing out places that identified "bedrooms" that couldn't qualify as bedrooms legally).

Second, he told us that this call was at his discretion and that even though it might not technically qualify as a bedroom, he would call it one for the appraisal (which already suggests to me that the law is not very clear cut). And then he LIED by not counting it on the paperwork. So that's just a jerk thing to do. At least be upfront with us.

Third, the comps he used reflected only the worst on the market that could possibly compare with us. Most had 2 bedrooms (not even the 3 he was willing to count), some had only 1 bathroom (we have 2.5), and most have fewer square feet. Some were over a city boundary in a lower-income area with fewer town amenities. There were better examples, but he didn't use them.

Another problem that we realized in retrospect is that this attempt was taking place in December. So even though we felt he had some good comps to pick from, it was not exactly the height of the housing season (comps are usually pulled from a 3 month window). That was our bad.

I was pretty livid--the paperwork process was intense and we'd spent a lot of time working on it. I felt like we didn't get a fair look so we appealed the appraisal with his company. Unfortunately, they backed his numbers and we didn't have time left on the validity of our paperwork and credit checks to hire a new appraisal company, so we were in a take-it-or-leave-it scenario. We left it. Not just because our home value declined but because we felt it wasn't an accurate decline.

Fast forward another 18 months or so. By now interest rates have dropped even more, so we're actually glad we didn't put money into refinancing last time. A few months back we looked into applying for the government refinance program, HARP, which helps homeowners whose home values have declined. Unfortunately, we bought our home just a few months too late to qualify.

We started the reapplication process again in April but after some missed calls and other delays, didn't really get the ball rolling until June. The appraisal was in July--a factor which I think helped us given all the recent home sales in our neighborhood (much more volume than the December time frame).

We also were guaranteed that we wouldn't have an appraisal with the same company, though I didn't know that until afterwards. The appraisal form has a spot for the appraiser to verify that they have not appraised the home within the last 2 years.

But the one thing we did that I think had some impact--besides the luck of the draw of getting a nice appraiser--was actually prep the house to make it more presentable. Even though an appraiser should mostly consider the "bones" of a house, I figured it wouldn't hurt to stage it a little bit. It prompted us to clean out the breezeway and transform it from a cramped storage space to a pretty seating area. It also prompted us to finally install a light in the "non-bedroom" and straighten the room up from what was my furniture refinishing space to something that at least approximated a real bedroom, in the hopes that might influence the determination on whether it counted or not. So we went from this:

 To this:

We thought having an inflatable bed made up might help too.

We also put together a print-out on all the improvements we'd made since we bought the house (this blog made it nice and easy to go back and remember what we'd done). And since the last attempted appraisal, we had done some major work like energy loss mitigation, the bathroom remodel and chimney relining and capping.

In the end, our house appraised for exactly what we paid for it!!!! That might seem bad, given decades of rising values--especially given the money we'd put in--but it was all we needed! We had our downpayment in place and didn't need to put any extra money into the refinance except closing costs. Plus we got our 4th bedroom back! In this case, it paid to be patient and try our luck again. And I think it was a good thing that we didn't ask the county to update our tax form to record the loss of a bedroom. It meant one more year in taxes on a room that at least one appraiser didn't think counted, but it kept us on the record as having the bedroom. The appraiser also noted how lovely our breezeway was, saying it was a shame how many people let those rooms just turn into ugly storage spaces (if he'd only seen it a week early...) so I do think that the staging worked to our advantage. Whatever the causes, we now have a shiny, new mortgage with lower payments and a chance to pay it off faster. Yay!

More Electrical Confusion

Long-time readers may remember from this post and this post that the wiring in our house is a little strange. Not just because the house is over 60 years old and the wiring isn't modern--it is also suffering from a past owner or two that liked to rewire things and clearly didn't know what the heck they were doing. First of all, we have GFI outlets all over the house. For the kitchen and bathrooms, that's ok. But we also have some scattered around the walls, like in our dining room and office.

We had a strange incident last month when something we had plugged in the dining room went out all of a sudden, and at the same time as something plugged into the shared wall in our downstairs bathroom. We decided to try to tackle the bathroom first. I tried resetting the GFI but, oddly, the button wouldn't depress. It was as if something were blocking the button. We checked the volt meter and, sure enough, no power. We headed to the circuit breakers but nothing was tripped.

We went back to the dining room, totally stumped as to why both plugs died simultaneously and, after a quick consultation with our electrician friend P, checked the plug to the dining room. (Yes, in retrospect that was the totally obvious next thing to check, but it was behind a piece of furniture and it never occurred to us that the problem could be there.) Sure enough, the dining room had a GFI box too. We were able to reset it, which fixed electricity and unstuck the button in the bathroom.

This wiring scheme doesn't make any sense at all and even P can't figure out exactly why these two plugs share a circuit and two GFI plugs. As I said, some crazy electrician lived here before we got the place.

And in what I truly hope is an unrelated electrical problem (because that would be even crazier wiring if it was related), the light at the end of our walkway went out. We figured it was the bulb, but no. Neither D nor I have a clue how to fix it, since the wires aren't accessible. Might be time to call in the pro again. Fortunately, we don't really use the light anyway, so we don't miss it much.