MineralMan breathing a huge sigh of relief

[franksolich]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2154285

Oh my.

MineralMan  (1000+ posts)        Thu Oct-20-11 03:01 PM
Original message
 
Refinance! - What an Ordeal

Like a lot of people, my wife and I had some bad financial years recently, due to the economy. We are both freelancers and have always been self employed. The one good thing is that we owned our house outright, thanks to having sold a house in California and moving to Minnesota, where property was much cheaper, about seven years ago. But, in the interim, our income dropped and we blew through our savings and our very modest retirement accounts, and even had to use our credit cards a lot for a while.

Well, things have improved a little, but that credit card debt was killing us, eating up every penny we earned, and at interest rates that were frightening. So, we decided that the only solution for us was to refinance our paid-for home to the extent that we could pay off the credit cards completely. After a couple of shrug-offs from our own bank and another local lender, I went to Lending Tree.

Anyhow, I hooked up with a bank that way that thought we could take advantage of a federal program, so we were off to the loan process.

If both people in a household are self-employed, this is not an easy matter. It's unorthodox, and bankers don't like the unorthodox. The hoops we had to jump through to document the fact that we could make those mortgage payments were held really high. Thankfully, we are good about saving paper, and we needed it all. I won't go into the details, but I must have faxed and emailed 200 sheets of paper, scanned dozens of documents, and stood in front of a Fed-Ex fax machine for a considerable time.

In the end, the loan was approved, but not without tons of stressing over it. It was marginal, at best, and very difficult to keep my cool as request after request for yet more documentation came through. The two 20-somethings from the bank who shepherded this along were pretty cool about it, and managed to keep my anxiety level down.

 Well, today we got final approval and we're closing tomorrow evening. We're out of the woods, and will be able to begin building reserves again.

The moral of the story, I guess, is that there may be a way out of a deep problem, but it may take huge amounts of patience to get through it. I'm breathing a huge sigh of relief today, despite having a new mortgage at the age of 66. That's not so good, but it solves the problem.

The MineralMan primitive's been having financial problems since January 2007.

I wonder what caused that.

MineralMan  (1000+ posts)        Thu Oct-20-11 03:14 PM
Response to Reply #1
 
5. That's true enough. However, the tight lending situation now is making it difficult for people to find ways to get out of serious trouble. I'm not even sure what federal program this thing was done under, but apparently it's a fairly new one. I'm sure the bank will be selling this loan off to a government agency somehow, but I don't know the details of that. I don't really care. This will let us get some reserves built up fairly quickly, and then pay the mortgage off as fast as we can.

MineralMan  (1000+ posts)        Thu Oct-20-11 03:24 PM
Response to Reply #8
 
9. I know. The equity was the only thing that made it possible, and I know that most people aren't so lucky. As it is, we've lost about $70,000 in value on our home since we bought it. If we hadn't been able to roll the money over from selling the house in California, we'd be screwed right now. It's just luck, really. I lived in that CA house for 30 years, and bought in in 1974 for $20,000. Things got really screwy in the real estate market, and then we had to move to Minnesota to help my wife's parents stay independent and in their own home.

What a world!

MineralMan  (1000+ posts)        Thu Oct-20-11 03:16 PM
Response to Reply #2
 
6. Much lower.

One of our credit cards was charging 28%. The new mortgage is at 4.35% Not the lowest around, but spectacularly lower than the old debt. We're both breathing a sigh of relief today. We'll break out the champagne after the closing.

MineralMan  (1000+ posts)        Thu Oct-20-11 03:18 PM
Response to Reply #3
 
7. Good for you!

We had refinanced once before, several years ago, and it was LOT easier. The long distance nature of this one, and the need to send everything by fax or email really complicated things. I'm just glad I have a flatbed scanner on my desk. Our rate wasn't quite as low as yours, but still lower than any loan I've ever had before.

I'm glad you got your loan, too!

It's a long campfire, culminating in this:

MineralMan  (1000+ posts)        Thu Oct-20-11 08:08 PM
Response to Original message
 
31. I'm quite sorry I posted this. It has led to a lot of unwanted advice from people who know nothing about the particular situation, and about whose expertise I know nothing. I wasn't really looking for advice. I've had advice from a number of competent sources. The situation is such that this is completely risk free for us, and the decision was taken after a lot of consideration. There are factors involved that I do not wish to discuss on DU. So I won't.

I have done my research very thoroughly on this particular decision and it is the decision that makes the most sense given the situation and all the factors involved. Since none of the advice givers have any knowledge of the actual situation that led to this, they are incompetent to offer advice regarding this particular transaction.

Again, I'm sorry that I mentioned it.

By the way, MineralMan's credit score is 785, and his wife's around 750.

Information provided courtesy MineralMan himself.

[67 Rover]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2154285

MineralMan  (1000+ posts)        Thu Oct-20-11 08:08 PM
Response to Original message
 
31. I'm quite sorry I posted this. It has led to a lot of unwanted advice from people who know nothing about the particular situation, and about whose expertise I know nothing. I wasn't really looking for advice. I've had advice from a number of competent sources. The situation is such that this is completely risk free for us, and the decision was taken after a lot of consideration. There are factors involved that I do not wish to discuss on DU. So I won't.

I have done my research very thoroughly on this particular decision and it is the decision that makes the most sense given the situation and all the factors involved. Since none of the advice givers have any knowledge of the actual situation that led to this, they are incompetent to offer advice regarding this particular transaction.

Again, I'm sorry that I mentioned it.

So this 66 year old man just refinanced a mortgage for possibly 15yrs or maybe even 30 yrs, so that would make him either 81 or 96 when fully paid off if he is not dead from some sort of an infection from pulling his own teeth with a rusty pair of pliers.

I see the banks are still being irresponsible in their lending practices, thanks bwarney/chris.

[Erasmus]

Well, today we got final approval and we're closing tomorrow evening. We're out of the woods, and will be able to begin building reserves again.

The moral of the story, I guess, is that there may be a way out of a deep problem, but it may take huge amounts of patience to get through it. I'm breathing a huge sigh of relief today, despite having a new mortgage at the age of 66. That's not so good, but it solves the problem.

So it was stressing you to have credit card debt and not much income?  It's good enough for our country, that type of financing should be good for a DUmbass, too.

[jukin]

Many variables but if the CC balance was high enough and the points on the loan were low enough it could be a good move. I doubt he did a full analysis.

I bought my first house in 1985 and was self-employed. They made me go through tons of hoops and put 25% down in a rapidly appreciating market. The S&L made me go back years to prove the down payment was mine and not given to me. Then, Billy Jeff started making banks wave things like that and we ended up with the sub-prime financial crisis.

[delilahmused]

Dave Ramsey's Total Money Makeover! We're about halfway through paying everything off and no new financing whatsoever.

Cindie

[BattleHymn]

Dave Ramsey's Total Money Makeover! We're about halfway through paying everything off and no new financing whatsoever.

Cindie

I'm trying to get my brother-in-law and sister on the TMM, but they haven't hit rock bottom yet to think they "need" to do anything different.  Right now we have no debt other than our home, and we are looking at giving ourselves a birthday present next year of having the house paid off in full, when I'll be 31 and she'll be 27.

We didn't really need the TMM to get a handle on extraneous debt, since we both learned the value of a dollar a long time ago, but for entirely different reasons.  My frugality comes from my parents.  Her frugality also comes from her parents- taking her to eat at the soup kitchen.   

[franksolich]

.....and we are looking at giving ourselves a birthday present next year of having the house paid off in full, when I'll be 31 and she'll be 27.

Whoa-ho.

Congratulations!

Damn.