June, 2008. Evan and Jane were preparing for the move of a lifetime. Three states away, they had chosen their “dream home” and it was being hurriedly finished in anticipation of their arrival. Although they hadn't yet closed on the house, Evan's credit was in the final stages of being repaired and they felt confident that they would close by the end of July.
The realtor had given them a fantastic chance: repair your credit, move down and get to work until you can get financing, then with your great down payment and any rent you've paid going toward a down payment also, close on this beautiful house. They'd been in his office. He had run the numbers. $1500/monthy. $20 thousand down. They had taken their W-2's, his paycheck stubs and their bank statements and they were praying for a chance such as this one.
When Evan and Jane decided to make the move, it was so that Evan wouldn't have to work so much and they could buy a nice home with some property that they could afford. They hadn't owned a house before, but knew that once they did, it would be for the long haul, which made them both very happy. Jane liked the idea of having a lot of yard and a cozy home in which to watch her plants and trees grow and raise their children; Evan liked the idea of working less and spending more time with the family.
When they went on their exploratory trip, the couple was thrilled at the cost of homes compared to where they came from. Taxes were manageable and household costs were lower. They were confident that even though it might take some time, they would be able to repair Evan's credit and be able to get financed.
The realtor they met said they could look at any house, but that he worked directly with a builder and had some homes that the couple might like. He said that if they chose one of those homes, it would be easier for him to work a deal such as letting them move in before they closed on the property. The houses were not what Jane was interested in, but Evan seemed pleased, and, as many couples will do, they reached an agreement: if Jane would live in the house that Evan absolutely loved for 20 years while they paid off the mortgage, then he would buy her big old farmhouse complete with barn and 20 acres for their later home. Jane agreed. After all, she thought, the house Evan had chosen was beautiful.
Moving issues and challenges aside, the couple made it to their destination and settled in. Evan went back to work only to discover that not only was he working less than even 40 hours, but they had cut his salary by 55%. Eternally optimistic, however, the couple lived off their savings and trusted that he would be back up to what he had been previously making shortly.
Meanwhile, Evan's credit score continued to climb and things were looking up on the financing front. The realtor re-ran numbers and informed them that their payments would be about $1900/month, not including insurance and escrow and that he had thought they had more for a down payment. Jane was looking for work, but even if she had an income, they couldn't use it, because her credit had not been repaired and was not in great shape, which would only hurt the couple in the long run. The problem was Evan's income.
While Evan did all he could to eek out a little extra from the manager of his branch, the two of them began to realize that they might not be able to make their “dream house” work. Their savings were rapidly depleting with the cost of rent and the household bills and they had just found out that the money they paid for rent would not be able to be used as part of their down payment. The realtor recommended that Jane get a full time job, but that meant full time daycare costs which the couple hadn't planned for. Things were rapidly falling from hopeful to hopeless and still, they believed.
Jane began looking at other options. Could they rent? Should they salvage the savings they still had and buy? What would they do? They didn't have enough money to go back where they came from, but they couldn't keep their family in the state of limbo in which they were living. Evan clung strong to the idea of the house for a time, but was rapidly changing his mind. His dream was quickly becoming his nightmare.
