A Refi 4 Years in the Making

It’s no surprise to anyone who’s read the Betwixter with any regularity that I’ve become one of those people who is bitter at the system that extols the virtues of the “small business” as the backbone of our economy, yet makes it extra challenging for said “small business” owner to navigate said economy.

Years ago, I wrote about my excitement over becoming a home owner at the ripe old age of 23.  This was 1 part naivety (hoping to live the “American Dream”), meets 1 part desperation (insert restraining order against landlord).  I assumed, like most in 2007, that I could buy a starter home, be in it for 3-5 years, and get out with a little equity and move on as I pleased.
Well, we all know what happened after that.  My neighbors in my new community all bought for somewhere between $20-100k below my price and lucky me: I was first in and paying top of the market interest rates on my mortgage!  So, naturally, I contacted my lender and sought a refinance.  For the sake of your sanity as my beloved readers and so as not to rehash the gritty details and give myself a panic attack, I’ll just summarize it for you like this: I fought the banks for 4 years trying to get my interest rate down. I never missed a payment but wrestled with the implications of everything from walking away from the property to a short sale to envisioning myself as an old lady, still in this “starter home”.  The root of my issue was the mortgage industry’s strict standards towards those who are self-employed and their lack of ability to notice or care that unlike many of their customers, I was an upstanding (paying) client who was being gouged monthly on my rates verus the market rates.  Every time I’d go into my bank, they’d cheerfully point out that my rates were egregious and I should refinance.  It took all of my willpower not to lay them out verbally.

 

All of this is leading to a point…

 

After years of hard work, fighting with the bank, and patience that doing the right thing would eventually pay off (and hey-it’s just money right?!), I was finally able to close on a refinance last week.  It felt oddly anti-climactic, but also nice to feel a little sense of financial relief as well as to know that I may not be trapped in this home forever (partly assisted by my appraisal which told me that I am way less under water than I once was).   I feel like a sucker for still working with the same lender who, after almost 6 years of ripping me off, still gets to keep my business. But for better or for worse, they wore me down and were the first willing participant to give me a new loan!

After all of this I’m not entirely sure what I learned.  Perhaps not to inherently trust conventional wisdom (ex: that the market always goes up and that real estate is always a good investment).  And maybe that it’s best to factor in a plan C or D when making such a big decision (like not just assuming I could rent or sell if I ever needed to, because for some time, neither were an option). Mostly, I think I just learned that you can’t ‘know what you don’t know’. Meaning, I can’t and tried not to beat myself up over making a bad real estate choice.  I had no way of knowing I was buying at the top of the market. I had no way of knowing when I bought that I’d be self-employed when I sough to refi (nor what those rules would look like since the mortgage industry made an about-face on their policies).  But mostly, that you just have to take these annoyances as lessons and keep going.  On the plus side, I become known as the “cautionary tale” amongst my real estate buying friends in later years, so my lesson learned was their gain! You’re welcome…

2 Comments

  1. Darrah…congratulations on sticking with it and finally obtaining a new mortgage at current rates.
    Your hard work has paid off in many of your other ventures as well.

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