Monday, June 13, 2011

The sweet smell of rejection

So, as you may have gleaned from previous posts, the past few months have been rough. Since February 1st, I have been out from work approximately two months. All of February and intermittent days in March, April, and May. This has had a financial effects, which I am still trying to dig myself out of. I can do it, but not as timely as creditors would like. I would have preferred never to have fallen behind on bills, but thems the breaks. (when someone calls to inform you to discontinue an automatic payment from a bank account because there are no funds in that account, please take this person seriously and don’t give the spiel of “ceasing the automatic payment will take two months to process. Please ensure you have funds in your account until that time.”

I’m a fairly frugal person and I don’t have a lot of debt, and literally 99% of the debt I have is the so-called “good debt”—mortgage, student loan, home improvement loan. I guess it’s called “good debt” because these are seen as investments. However, it’s still a good chunk of my paycheck every month that I would like to apply towards other things. And all debt is "bad" if you can't make a payment.

Anyway, I was eligible for disability pay for the days off in March as mandated by my doctor. It was 60% of seven days gross pay and it was such a freaking hassle to get it, and it took so freaking long that it almost wasn’t worth it. But in mid-May, I finally get the check and the first thing that I did was apply it to my primary mortgage. Of course, the clerk had to point out that I was past due in making a payment. Yes, I know. I’ve been out of work because of illness and I am trying to catch up. So the clerk did a quick check and said “hey, you are eligible for automatic loan rate adjustment. This is really quick and easy and there are no closing costs to you. It will lower your monthly payment because the interest rate will be reduced.”

I figure it would be worth investigating, and I swear that program is a will-o-wisp to get you to talk to a mortgage broker because once you are face to face, he will find a refi plan that You Are Eligible For, even if it turns out that you are actually not eligible for the quick and easy refi that your mortgage holder said you were eligible for. But “there are other plans and this one will lower [your] interest rate but only the primary mortgage is eligible” and not both, like I was originally told. So to cut a long and convoluted story short, I signed the refi papers on Thursday but after thinking about it, I realized that I wasn’t really coming out ahead. I wasn’t screwed but pretty much left in the same position so I wanted to cancel it. The net effect is that my payment on my primary mortgage would be lowered by about $90 a month, but the term would be reset to 30 years. To pay it off in 25 years (keeping with the timeframe of the original mortgage), I’d have to add an extra $100 a month. Which is pretty much where I am now, financially. $90 a month isn’t going to make or break my budget.

I sent a message to mortgage broker, requesting that he cancel the loan process and he called me back to say he had been trying to get in touch with me that day but I’d left my mobile phone at home this morning. His news? I had been rejected for refi through the Home Assistance Refinancing Program because I had been late on a mortgage payment over the past 12 months. Please remember that the only reason I even started down this road was at the mortgage holder’s suggestion BECAUSE I was behind on my payments. However, I’ve never been so happy to have been rejected.

No comments: