Back in 2007 when we bought our house, we literally did it at the beginning of the housing bubble burst. When we went to apply for our loan, interest rates had begun to shoot up. I remember because our mortgage broker at the time said "Ok, so we're going to wait until the last possible minute to file our application so we can try to see if the interest rates go down." Yeah, that didn't happen, so our primary mortgage went in at 6.25% interest. Due to the ballooned interest rate, and among other things probably, we also got talked into doing an Interest Only loan with a 10 year Adjustable Rate Mortgage. That means after 10 years, they can change the interest rate to whatever the current rates are. In our case, I suppose that wouldn't have gotten worse, but something tells me they'd say "You know what, I think we're not going to adjust this rate..." The biggest issue really, was at year 10, our payments would BALLOON up about 1000-1500 more per month. Our broker let us know about this up front, but sort've dismissed it by saying "well, you'll refinance within 10 years, it'll be super easy and really simple".
I'd type LOL, except it really doesn't make me laugh. I tend to cry a bit more.
So in 2009, when our budget was super tight and we were looking at cutting bills, we said "well, what about refinancing and lowering our mortgage?". Our first call went to Suntrust, who told us at the time that they COULD get us on a Fixed Rate loan, but our payment would go up 50 or so more per month. Since this was counter productive to our initial goal, we called more brokers. One group, which shall remain nameless, told us they could get us into a FHA loan, consolidating both our loans into one, and their initial estimate had me saving $150 per month. Now around this time, we knew our 2010 payments would be rising, due to taxes on our house increasing and the Escrow account we had being short of the taxes. We told them this up front, they said it'd be fine, no worries. So we went along, paid a discounted rate for an appraisal on our house (Negotiated because Shannon knew someone who worked there), and proceeded with applying for this loan. Now, the whole time they are pushing that we HAVE to get this done before 12/31/2009, because in 2010, the rules won't let them pick and choose their friendly appraiser, they'll have to be assigned an impartial one who won't work with them to "fudge the numbers" to fit their loan estimate. Hmmm, sounds fishy right? But they had to do this a little after our appraisal came in, and they said "Alright, everything is on track". It goes downhill from here. Suddenly, their estimates kept getting higher and higher. And they wouldn't even call and let me know first. I'd get a copy of something that had a new number and when I asked the people I was working with, they'd react "Oh, yeah, so it turns out your Escrow account was short, so we needed to raise your amount owed to cover the shortage". Yeah, that shortage I had mentioned in our very first call, they had no idea about. Right. Well this happened a few more times, and each time we threatened to just back off, and each time I talked to the company owner who PROMISED me, "There numbers are it, we have pulled some strings and this is how much you will pay, period." At this point, we're at an increase of about 80 dollars. But they are making promises that with a FHA loan, we can streamline refinance in 6 months, no fees, no nothing, just take the lowest interest rate. So, I play along and we go to closing on 12/30/99. The title agent shows up with the papers and we didn't even get through the first one. The monthly payment had gone up. Again. And this time, we're talking an increase of $140 per month. I called UNCLE. I told the guy I was sorry for wasting his time, but I was not going to close on this mortgage. The next day, I got a call from the company saying "Okay, HERE'S what happened, but we will work to get the numbers back to what they were before. Let's go ahead and close today." This time, I held firm and said "NO, we are done. I don't feel comfortable with this at all and I'd rather wait until this Escrow shortage, which appears to be the biggest issue in our refinancing, is repaid." What I got back justified all the decisions I just made...They called me shortsighted and petty. Yeah. The people trying to get my business resorted to insults. They said I was being petty over a few dollars and I was gambling with my future because I wasn't taking their loan. They played a sad violin about how much they had done for us and how much we were shoving it back in their faces. And then after I reiterated I was not comfortable with it, said "We will not have a loan for you in the future, work with someone else". Side bar to this story, my co-worker's brother owns a different mortgage brokerage which him mom also works for. He asked her to speak with me and after reviewing the paperwork and story, her take: "I won't tell you not to take this loan, because your current one sucks, but they are absolutely not being truthful about this streamline refinance and the things they are promising you and not things I would bank on."
After that whole ordeal, I filed all the emails away and put refinancing in the very back of my mind. I didn't have the emotional energy to deal with it. During this whole thing, Shannon had an ectopic pregnancy which had to be removed, so we were both grieving from that, then to have all this happen on top, I just COULD NOT think about going through it all again...
Then in Summer of this year, Suntrust called us and mentioned that we might qualify for a no-appraisal refinance. I called them back with every bit of doubt in my mind. I still felt like "there's going to be a catch, what is this big catch." The very patient and understanding man I worked with explained that our mortgage backer, Freddie Mac, had only within the past month changed their rules so instead of an appraisal, we could use a home value estimate in place of that. And all our other conditions fit into the window to make this possible. I asked him how much it would raise our payments to refinance to a Fixed Rate loan. He sat in silence for a moment and said "Joe, your payments aren't going to increase, because you are paying SO much interest over the rates now, even if you SHORTEN your loan, you might not pay any more per month". Of course, the paranoia I have caused me to say "No, this guy is forgetting about this or that, this isn't going to come back like this." Up until the moment we signed the papers today, I was SURE someone was going to halt this and say "WAIT WAIT, we forgot this about their mortgage, they aren't going to pay less, we need to up their payment!"
But, good ending to the story. We added 5 more years onto our loan, and end up saving close to $250 per month. That is gravy on top of the underlying thing: No more ARM, no more Interest Only, no more STRESSING ABOUT A BALLOON PAYMENT COMING IN 5 YEARS! I almost got down and kissed the ground after we left the office. So happy to finally have this done.
And bonus, I got this because of *surprise surprise* a President Obama economic stimulus. Yes, I do drink the kool-aid. :-) Probably not one of the controversial programs a lot of conservatives would complain about, but I like that I can show how this program clearly helps my family, who are NOT looking for handouts, to continue paying our mortgage and dig ourselves out.
I suck at updates.
12 years ago
