Is This, Bye Bye Home?

Decisions, we’ll never know the outcome till we make a choice. Like in the next four to five months, I maybe making the worse or the smartest decision ever. Ow golley! Time is indeed running out for me. So the other night over Thanksgiving dinner, I decided to discussed financial matters with my father. Being a good businessman that he is, I was asking for his opinion and recommendation on how to deal with this forthcoming unfortunate event.

You see, my home mortgage is due for refinancing this coming June. And with the current interest rate, I may end end paying more of what already feels like a huge truckload for me. I guess, I didn’t anticipate the market to be so downcast and adverse. What I thought at first was a sound investment, will soon turn out a financial dilemna. I know what you guys are going to say, that I’m one horrible accountant! And you are right.

Dad wasn’t sure at first where our conversation was heading, but soon as I mentioned the word mortgage and interest rates; he started nodding his head. I told him how I had two loans on my house, and had already refinanced my first mortgage (and even able to take some money out to purchase the other house in Oregon). However, the second one will wind up a problem. Seems like my broker is unable to give me a reasonable rate, even with my good credit history. Most of the figures he showed me was way beyond what I could afford. The market is indeed in bad shape, real estate biz here in California has taken such a huge downfall cause of high interest rates. And now I’m in the same sinking boat.

Dad asked me why I only refinanced just one, and told him about my pre-penalty provision, which he understood right away. Interest rates are high, that I found myself almost convince that if I’m unable to get any acceptable rate offers; I may end up putting my house on the market or at the very worse, surrender my home to the bank. Not the most ideal thing to do, but I’m not about to spend my whole month’s paycheck on just a roof over my head. It’s not going to happen, I may as well give up the house and cry over my paucity. I have other financial responsibilities and one life to live. But still, thinking about it makes me want to cry in disappointment. However, I’m still very hopeful that something good might happen between this time till June.

You think interest rates the only issue. Heck no! There’s this other refinancing requirement banks are asking for, they are dictating for ten percent downpayment to push the interest rates down. But where in hell would I be getting $65K? At first, I thought they were kidding. But they’re not, they mean it, and they mean business. And there’s no haggling either!

Dad was quiet the whole time I was talking, I knew he was trying to come up with a good and sound advice. My father have to agree that this is truly not the right time to refinance my house, and that I’m screwed with the $65K down payment. It’s one big chunk of money, I don’t have! Dad was very kind to offer lending me the down payment, but after doing my own math — I politely declined. There is no way I can pay my father that sum, and I don’t want to owe anyone any money. It’s not that I’m too proud and unwilling to accept any financial assistance, but because of the mere fact that I don’t see it feasible paying my father back in the long run. I did show Dad my computations and like me, he seems convince that I should just surrender my property to the bank if I’m unable to refinance.

I have never lost this much money in my whole life and I hope I never will. My parents have raised us well to know how to bank smart. But then again, I cannot blame myself for this unfortunate event. I don’t mandate interest rates, taxes and other tarriffs. Base on my figures, my total lost would be somewhere between the mid 30’s. Some wampum I could have invested in my 401K or retirement account instead of gambling with real estate. It’s one tough lesson learned and I would hate to repeat the same mistake with my Oregon home. Looks like I’m moving sooner than planned. So, I maybe going Bye Bye Golden StateHello Beaver State! Of course, I will dread the day I leave this house here in the East Bay. I guess my only consolation from these horrible experience is that I still have a home, and a place to call my own. Just in Oregon though!

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16 comments

  1. abby · November 24, 2007

    ooh arnel, sorry to hear that! i know what you mean about the downfallen market, everyone’s suffering talaga. hang in there, hopefully a better resolution takes place. 🙂

  2. sardonicnell · November 24, 2007

    i guess “failure” is part of life na talaga. the interest rates are so high, i don’t know how other homeowners are doing it. i’ve been trying to condition myself, getting ready for that day when i’d be handing my house keys to the bank. but i’m trying to keep myself sane naman, i have to look at the bright side of things. i still have a home in oregon pa naman, and that i’ll keep till i’m able. golly! this darn market is so bad. i didn’t see myself getting hit by it. waaaah!

    thanks for the kind words, abby. hopefully eh may divine intervention na dumating. God bless and hope you had a wonderful thanksgiving!

  3. BobP · November 25, 2007

    Sorry about your losing that much money. I lost over a quarter million myself on preferred stocks several years ago after I had been promised 30 years of 8-9% returns. Lost interest and principal. Learned not to trust anyone anymore. You’ll find a way out of your doldrums; heck I learned how to do paying 8% on a 15-yr mortgage back in the 80-90’s. Godspeed.

  4. sardonicnell · November 25, 2007

    hello bobp, thanks for visiting my blog and for your kind comment. oh golly, a quarter of a million? that is a lot! we really need to think this things over a hundred times if possible, when we do this investment thingy. i’m just thankful though that i was able to take some money out on my first loan to get this other house in oregon ( and that i could afford). at least, i still have a roof over my head. i’m just hoping and praying that interest rates would mellow down a bit, so i can still keep my home. God bless :mrgreen:

  5. bw · November 25, 2007

    The real estate downturn isn’t only causing grief to the owners but to the banks as well. Just look at the amount of losses these financial institutions had to write off !

    Can’t the bank stretch their tight requirements and strike a compromise with you like you continue to pay the mortgage at the amount you can afford – at least you are trying to service your debt and you are not running away from it.

  6. Leap of Faith! · November 25, 2007

    nell, i really do hope things get better for you. it is so hard to lose something that you’ve grown so attached to over the years. count your blessings na lang, at least you still have another home.

    the problem in the US is all over the news and so many people are affected by it. hope it doesn’t worsen.

  7. thess · November 26, 2007

    Dear Nell, I don’t know what to say! but I guess everyone’s feeling it right now (not only in the US I tell you)
    i’m glad i’m married to someone who is careful w/ money, otherwise matagal na kaming bankrupt 😛
    anyway, it’s but right to keep on top of this, no matter how dreadful this situation of yours is right now..someday it’ll get better…and it’s good you thought of keeping 2 homes! i can still visit u there, if ever 🙂

    sister, enjoy your week…me labs yah 😀

  8. Pinky · November 26, 2007

    Sad naman this post… 😦 It’s the first time ever that I’ve heard banks asking for advanced downpayment on total interest payments – outrageous!

    Anyway, at least you have another home to live in. Who knows? This change in permanent residence might actually be the one you need, di ba? Just keep yourself open to the “surprises of the Lord’s spirit”, knowing that all works for good for those who trust in Him. Keep the faith!

  9. sardonicnell · November 26, 2007

    BW: oh yes, in as much as home owners are stress beyond their limits. i’m sure that banks are suffering more. i think it has something to do with the country’s economy. my loan alone was transferred to like 3-4 banks since i bought the house, due to bankruptcy issues i beleive. so this is some tough time for us all and i can’t complain much since i’m doing the best i can. i’ve made arrangements with the bank, but they too are shorthanded in terms of options. what kills me is the 10% down payment, since that is something i dont have. oh well, at least i still have my oregon home 😉

    KEITH: the issue at hand is indeed felt nationwide. i really didn’t want to lose the house, since i’ve have fond memories here for the past couple years. but then again, i can’t keep something i cant afford. if only i can keep the same monthly payments, i wouldn’t think twice keeping it. but interest rates are way up there, mine alone will jump from 6% to 10%; and it’s too much. it’s depressing, but i’m trying to just look at the bright side. besides, what matters most is that i have a loving family and a roof over my head 😉

    SIS THESS: i really thought that real estate is a good investment. my dad has been doing it for years and that’s his bread and butter right there. but then again, times are unpredictable — may up’s and down’s. dba? i’m just thankful though that i was able to take money out from my cali home and use that to buy my place in oregon. so di naman talaga total loss kong titingnan. please do visit me here in cali or oregon, my parents have homes here in sfo were we can bunk if ever you pay us a visit. unless feel mo ang beach and townish atmosphere, that we can find in oregon. come on down na :mrgreen:

    PINKY: it’s sad, but i’m trying to raise my spirits up. i still have time pa naman, have till june 2008. and we never know, some miracle might happen. dba? moving to oregon isn’t all that bad naman. my dad bought a house there too, two blocks away from me. malay natin at baka pati buong family ko eh mag relocate na sa oregon. heheheh 😀

    ALL:
    thank you guys for your words of encouragement. i might be SAD, but i’m filled with HOPE that things will get better. God bless you all and like my nephew (from sponge bob) use to say … HAVE THE BEST DAY EVER!

  10. tulipfleurs · November 26, 2007

    Hi Nell . . . I do hope that you’ll find a way to keep your home. All we can do is hope and pray for the best, di ba? Like most homes in the Bay Area, they have dropped tremendously in price. Anyhoo, hang in there . . . keep us posted. Take care too!

  11. sardonicnell · November 26, 2007

    hello lulu, almost every block here in my neighborhood has houses for sale. it even has a sign that says “reduced.” me too dear, i’m still hoping and praying for better deals. even if my monthly dues stays the same, i’d be contented. i just don’t have 65K to shell out to bring the rates down. thanks so much for the encouragement, i still have hope in my heart pa naman 😉

  12. Meeya · November 29, 2007

    hi nell, meron akong friend sa atlanta who got laid-off and since he wouldn’t be able to afford his home anymore kaya, hayun, he just surrendered it to the bank. pero for about a year, pinayagan siya ng bank not to pay any mortgage while he put the house up for sale. ayaw din kasi ng banks to forfeit any property dahil hindi rin naman mabebenta ng bank yun ng ganun kadali dahil sa property slump. plus, the bank has to pay for the upkeep, carrying costs, and taxes kung mapupunta sa kanila yung property. kaya ayaw din nila, as much as possible, to reposses homes.

    besides, if you surrender your home to the bank, it will wreak havoc on your credit score. it will take you at least 5 years to erase that “incident” from your history. paano na lang yung interest rate for your credit cards and other loans, i’m sure tataas din yan with the changes in your credit score.

    so hayun, talk to your bank and maybe you can come to a good compromise. anyway, huwag kang mag-alala kasi there are a lot of people who are in your shoes and some of them have been able to turn things around. 🙂 but i applaud you for sticking to your means. ang ibang tao would immediately jump on the chance for daddy to fork over some money di ba? good luck, ok?

  13. rollercoastermom · November 29, 2007

    oh no nell! i really hope everything works out in the end for you! i can’t imagine you living in oregon! i hope you keep us posted on this. it’s good that you still have a very positive outlook. keep it up nell! *hugs!*

  14. sardonicnell · November 29, 2007

    MEEYA: really didn’t want to surrender the house. hanggang kaya ko eh pipilitan ko to keep it. just as long as my mortgage stays the same. the bank said to call them around april-may cause maybe by then the interest rates are better. dad also suggested that i consult a housing rep to mediate/ negotiate between me and the bank. i heard that there’s also a home retention program that i can hopefully avail if i ran out of options. pero di pa naman ako nauubusan ng pag asa, good things will happen in due time. dba? and the bad credit stuff, my broker told me the same thing and i didn’t want to succumb to that situation. dad’s offer still stands pa naman, pero utang is utang and i know that between my house in oregon and this one here, i doubt if i can afford to pay dad back. at tsaka i’m an adult na, gusot ko eto kaya ako ang dapat na magsolve ng problema. dba? may awa naman siguro ang nasa itaas. di nya tayo pababayaan. i thank you so much for your kind concern. surely, we’ll make it thru 😉

    KRIS: thanks for that extra boost! i needed that to keep myself above the water and not let my hopes down. ikaw naman sister, ano palang ngyari sayo at ang tagal mong nanahimik? is everything alright dear? hope so… let’s keep our chins up hah. kaya natin eto, kakayanin :mrgreen:

  15. munchkinmommy · November 29, 2007

    hi nell! like everyone else, i’m also sorry to hear that you have this huge problem looming over your head. sa totoo lang, clueless ako sa mga ganitong bagay. 😦 pero i somehow feel that you will survive this problem, lalo na if you really really love your san fo home. i’ll email you a “mind exercise” you can do, which may turn out to be very helpful. 😉
    God bless, Nell! hugs to you! 🙂

  16. sardonicnell · November 29, 2007

    thanks so much, weng. it’s indeed a huge problem, pero ini-ignore ko na muna since we have to wait regardless. hanggang june 2008 pa naman yong loan ko eh. but i’m really praying that i get to keep the house, i’ll do the best i can (except umutang sa dad ko). hopefully, pumayag ang bank that we keep the house at the same rate i’m paying now. cause my oregon home won’t be ready till next year since i have teenants who has a contract with me till next year. so medyo screwed ang situation. pero may awa naman siguro ang nasa itaas. we’ll make it! thanks in advance for the mind exercise and i sincerely appreciate your kind concern, touch ang bakla 😉

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