Finally able to re-finance!
05-22-2010, 07:50 AM
#1
Super Member
Thread Starter
Join Date: Jan 2009
Location: California
Posts: 3,502
Many months ago I contacted my bank about re-financing my house to a lower interest rate and I was told "We don't do 100% loans." (what's with that since they already have a loan on this house at 100% of its value?!?!?)
Even though I put $70k down when I bought the house, the value has gone down to about what I owe on it now! I was so mad!!!! I don't want to disparrage anyone in the situation but I was so mad that people who were defaulting on their loans, who didn't put any money down, who couldn't afford the home in the first place, etc. were getting low interest loans, principal forgiveness, all the help that the government could give them but I, who NEVER, EVER has been late on ANYTHING couldn't get a break.
I called my bank last week to ask again and found out that with a new program, the home affordability program, they can do up to 125% loans and that I qualify for that. It's lowering my interest rate and my payments will go down a few hundred dollars per month! The state also did a property tax reassessment and that lowered my payment by $130. It's finally to a more comfortable payment for me.
I read an article today that a large percentage of the mortgage defaults happening now are "strategic" defaults. That's people who can afford their payments but they are so far under water on their loan to value that they are just letting it go. My first thought was... I bet a lot of people are as mad as I was about the situation I was in.
Even though I put $70k down when I bought the house, the value has gone down to about what I owe on it now! I was so mad!!!! I don't want to disparrage anyone in the situation but I was so mad that people who were defaulting on their loans, who didn't put any money down, who couldn't afford the home in the first place, etc. were getting low interest loans, principal forgiveness, all the help that the government could give them but I, who NEVER, EVER has been late on ANYTHING couldn't get a break.
I called my bank last week to ask again and found out that with a new program, the home affordability program, they can do up to 125% loans and that I qualify for that. It's lowering my interest rate and my payments will go down a few hundred dollars per month! The state also did a property tax reassessment and that lowered my payment by $130. It's finally to a more comfortable payment for me.
I read an article today that a large percentage of the mortgage defaults happening now are "strategic" defaults. That's people who can afford their payments but they are so far under water on their loan to value that they are just letting it go. My first thought was... I bet a lot of people are as mad as I was about the situation I was in.
05-22-2010, 07:59 AM
#2
Super Member
Join Date: Mar 2009
Location: North Carolina
Posts: 1,981
Hi Pam,
We had the same problem, I totally agree with you.
We took the $200,000 we made on our Livermore house and put it down on our LA house. Our house has gone down the $200+. We did get to refinance.
It is not fair for those of us that put a substantial amount down to be treated like those that did a 100% loan in the beginning. We have lost all of our equity. It was suppose to be a forced savings we could use to buy our next house when we retire. We aren't upside down yet, but not far from it.
When I hear some people may get their principal reduced because the value has gone down on those 100%. I think what about those of us that did the right thing and put up a large down payment, they aren't going to give us our equity back.
Ok enough venting. Glad you got to refinance. Have you had your property taxes reduced. You can in Calif. You just fill out a form for reevaluation. Ours have been reduced twice. Which has saved us another 300+ a month.
We had the same problem, I totally agree with you.
We took the $200,000 we made on our Livermore house and put it down on our LA house. Our house has gone down the $200+. We did get to refinance.
It is not fair for those of us that put a substantial amount down to be treated like those that did a 100% loan in the beginning. We have lost all of our equity. It was suppose to be a forced savings we could use to buy our next house when we retire. We aren't upside down yet, but not far from it.
When I hear some people may get their principal reduced because the value has gone down on those 100%. I think what about those of us that did the right thing and put up a large down payment, they aren't going to give us our equity back.
Ok enough venting. Glad you got to refinance. Have you had your property taxes reduced. You can in Calif. You just fill out a form for reevaluation. Ours have been reduced twice. Which has saved us another 300+ a month.
05-22-2010, 08:05 AM
#3
Super Member
Join Date: Apr 2010
Location: Illinois
Posts: 1,322
I understand so much. I did everything right. I put 30% down. I have great credit. I have never made a late payment. I am now upside down. Luckily I have no need to re-finance but if I did I would be up a creek without a paddle because I do things the right way. My properties are assessed 210,000 to high IMHO but I could only get 85,000 decreased for tax assessment purposes this last year. They said I could fight the assessment again next year and maybe get the rest of it knocked down.
And these people will strategically default and then be able to buy again in a few years. The taxes arent being paid so my city and state services are being cut even though I am paying out the nose. In the end they will be better off in retirement than I will be because I followed the rules. Sure does make you want to walk away!
And these people will strategically default and then be able to buy again in a few years. The taxes arent being paid so my city and state services are being cut even though I am paying out the nose. In the end they will be better off in retirement than I will be because I followed the rules. Sure does make you want to walk away!
05-22-2010, 08:08 AM
#4
Super Member
Join Date: Mar 2009
Location: North Carolina
Posts: 1,981
Originally Posted by seamstome
I understand so much. I did everything right. I put 30% down. I have great credit. I have never made a late payment. I am now upside down. Luckily I have no need to re-finance but if I did I would be up a creek without a paddle because I do things the right way. My properties are assessed 210,000 to high IMHO but I could only get 85,000 decreased for tax assessment purposes this last year. They said I could fight the assessment again next year and maybe get the rest of it knocked down.
And these people will strategically default and then be able to buy again in a few years. The taxes arent being paid so my city and state services are being cut even though I am paying out the nose. In the end they will be better off in retirement than I will be because I followed the rules. Sure does make you want to walk away!
And these people will strategically default and then be able to buy again in a few years. The taxes arent being paid so my city and state services are being cut even though I am paying out the nose. In the end they will be better off in retirement than I will be because I followed the rules. Sure does make you want to walk away!
05-22-2010, 01:44 PM
#8
Super Member
Thread Starter
Join Date: Jan 2009
Location: California
Posts: 3,502
Yes, feel penalized for doing the right thing. I've seriously thought... if I default it will be off my credit in 7 years versus potentially still being in the hole on this house in 7 years.
I can afford it as it was but it burned me up that I couldn't get a lower rate like people who were defaulting. Getting the taxes and interest lowered makes it easier to deal with the loss so far.
Do the government and banks not realize how people feel like the act of being responsible is being penalized? I'm not surprised at all that people are defaulting when they COULD pay their mortgage if they wanted to. Why not just let it go and buy another house that is so much cheaper?
I can afford it as it was but it burned me up that I couldn't get a lower rate like people who were defaulting. Getting the taxes and interest lowered makes it easier to deal with the loss so far.
Do the government and banks not realize how people feel like the act of being responsible is being penalized? I'm not surprised at all that people are defaulting when they COULD pay their mortgage if they wanted to. Why not just let it go and buy another house that is so much cheaper?
05-22-2010, 06:29 PM
#9
Senior Member
Join Date: Feb 2010
Location: Port Sulphur, LA
Posts: 313
I bought a double-wide after Katrina and upgraded to a "modular". (53K total before upgrade). Paid an extra $13K for the upgrade to the "double wide" which was needed to meet the 130mph wind code (fema guidelines) for the area I am in, 2X10's and such. The blue book value according to insurance company now (which says it is a trailer) is $20K less than purchase three years ago. Trailers depreciate. So this means I will never have any equity in my home, although it is appraised for over $93K and I pay property taxes to my parish.
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