Met an FB, and heard a worse story.
I met a FB tonight. She had just refinanced her house 3 months ago, after her arms first year was up. She bought the house with 100% financing, 80% first and 20% second. The first was at 4.xx%, around 1200$, and the second amounted to around 200$ on top of that, for a total of around As the year went on, her first went up to 1600$, and her second went up as well. At the end of the year, she was paying 2000$ a month total. She refinanced to a 5 year fixed, and got her monthly back down to 1800$. She doesn’t realize how screwed she is.
She had a story of a friend who was worse. Her friend down the street, in a similar situation, but 3 months later one. Her appraiser couldn’t make the numbers work. The pull down in the market had already bitten the value to much, for anyone to lend to her to refinance. She’s stuck in her ARM, watching the payments go up every 6 months. Her friend is going to loose the house, period.
I have surprisingly little sympathy for these people, who shouldn’t have been buying in the first place. The first lady told me she decided to buy because she had been renting for around $1100, and the rents went up to 1250$, for what was not that nice of a place.
Ok, so this makes no sense. She decides to spend even more money to buy the place at $1400. Even if the price had stayed the same, it was still 150$ more a month. Granted, it may have been a nicer place, I don’t know. But a year later, now she is paying $1800 a month, 550$ more than she was when she was renting.
Some people just can’t do math.