This weekend my wife and I are going to look at a house. With summer coming to an end and three winters aboard our 32 foot sailboat under our belt, we’re hoping the two-story, cinderblock walled, aluminum roofed and basically ugly building with one acre of land on a 45 mile an hour road and several double-wide trailers across the street could be our escape from the romantic but demanding aspects of year-round life on the water. 

Why aren’t we looking for something a little more attractive, maybe some land to build the perfect house on? It is a buyers market after all, right?

While my wife and I don’t have two pennies to rub together for a down payment – the cost of living pretty much consumes both our salaries – we are fortunate enough to own several assets which have appreciated in value over the last few years. The combined value of two sailboats we own is nearly equal to the asking price for our little would-be concrete palace, which I figured should be enough to convince a lender to give us the cash.

It’s how my grandparents, parents, aunts and uncles bought their homes; it seems like each generation goes through its own right of passage dealing with less than ideal living conditions while they either squirrel away money to buy a property or put their back into building a home before they can put down roots and start a family. 

Having heard their stories, I was surprised when my wife and I sat down with a mortgage broker who basically told me I’ve been breaking my back – literally – keeping the boats in good shape and adding various upgrades, for nothing.

She said the bank would only consider the value of our assets in granting us a loan for a down payment on the property. We would own the house and make two separate payments each month, one to cover the down payment loan and another to cover the mortgage. I’ve done the math and when you add the interest from both the short term, high rate loan for the down payment and the fairly reasonable 30-year mortgage, the monthly payment for our cinderblock citadel would equal more than the rent for a four bedroom, double bath apartment in downtown Portland.

While I understand a financial institution’s need to see some cash up front, their willingness to allow us to “rob Peter to pay Paul” shocks me. Banks say down payments are now required to prevent further foreclosures, yet if we take the advice of our banker and go belly-up on our mortared home all they’ll have to show for it is the interest they collected and two very nice sailboats. 

I’m no professional lender, but why not cut to the chase and put a lien on my assets – which, again, are worth more than the seller’s asking price – and loan me the total amount necessary to purchase the property?

We would be far less likely to default making only one monthly payment and should the worst happen, the bank – with a little interest in their pockets and seized assets worth more than their initial financial risk – would end up in the same place. Sure, they could make more short-term profit from issuing two loans, but I’ll spend another winter staring at shrinkwrap, breaking ice off the hull and huddling around our heater before I go down that road.

If finding the right home isn’t hard enough, paranoid lenders are making homebuyers jump through hoops that put them in even more risk of foreclosure, while brokers cry “buyers market” from the rooftops in hopes of persuading would-be-borrowers that now is the time to buy. 

Where is this mysterious buyers market? In the hands of the lenders, who are going to have to begin considering foreclosures a cost of doing business and learn to play ball with honest people before I’m able to put a roof over my wife’s head.

- Nate Jones