No one wants to help out the financially responsible.

We tried and miserably failed at refinancing our house.  I feel defeated, depressed, helpless.  I think I’m going through the Kubler-Ross 5 stages of grief…probably somewhere between anger and acceptance knowing there is no way to bargain ourselves out of this situation.

We needed our house to appraise at 530k because we could only afford to get our mortgage balance down to 424k (80% of 530k).  Sadly, our appraisal came back at 500k…a 9% loss from our 2006 purchase price.  If you add in the improvements we have made on to that though we have lost 17%.

The bank tried to appease us by telling us we could refi, but then we would have to pay PMI.  PMI is tacked to any financing that’s over 80% of the homes value.  However, given our job security, credit score (I didn’t know it was possible to have a credit score >800!), and past payment history (we have paid down our mortgage balance by 18% in 3 years!) I’m insulted the bank can’t find a way to get around this PMI issue.

It also comes down to the fact that I blame this entire housing crisis on the banks and credit companies in the first place…they are the ones who screwed up the system so that home prices were so inflated.  And then they practically threw money at anyone with a pulse…and now they are judging us and saying “no you guys aren’t good enough”.  Add to that Obamas April ’09 plea that “everyone should refinance and take advantage of these low rates” and I get really pissed.  Seems like the only ones who are capable of refinancing are those people who are so screwed they are about to lose their  home, or those people who have all the correct boxes checked and have 20% equity in their home (or have a Fannie-Mae backed loan).  There is no in-between.  An easy way to solve this is to make banks set refinancing terms based on the original purchase price.    Of course it isn’t in the banks best interest to get people like us into lower rate loans…they know we will pay because we have the $$ to do so and we are financially responsible.

I guess a positive to come from this is of this is when we are ready we will be able to pay cash for our car since we have it readily available.  Then the process of racking up more savings to hopefully refinance before our ARM adjusts in 2011 will begin again.  I’m still no where near the ‘acceptance’ stage but I’m sure it will come soon enough.

Comments

  1. mandysmusings says:

    Oh, Jules, I feel for ya! It makes my head spin thinking of all the ins and outs of home ownership. Makes me glad I’m not in that boat. Yes, yes, I’m throwing away my money in rent, but I’m still not sure what “PMI” is, and I’m glad for it.

Trackbacks

  1. […] mortgage.  Given the current rates and the instability of them staying low we figured why not.  We tried last July, but our house didn’t appraise for what we needed it […]

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