01 April, 2009

I feel like a leper or a red-headed stepchild

At least, that's how I feel in the eyes of the mortgage industry right now.

One year ago, I was the golden boy. I was the perfect candidate. I was what every bank or mortgage company dreams about. I have stellar credit. A decent paying job. No outstanding debts. And my objective was to live reasonably within my means. I did not want to by an ostentatious 2600 sq. ft. mansion on Lake Washington, or a penthouse condo in Capitol Hill. I just wanted a modest place that I could call my own. I even planned, by design, to move with my housemate, so that I could manage expenses. 

All was good, yes?

When the housing market really took a dive recently, and interest rates plummetted to insanely low levels (sometimes under 4.5%), I thought that I would be a shoe-in for refinancing, to save a couple hundred more a month - which doesn't hurt. Well, unfortunately, it's not that simple. The reason, of course, that the interest rates are so low is because banks are hurting. And the reason banks are hurting is because of bad loans and poor economy. And the result of all that is housing values dropping. And the result of all that is I don't have enough equity anymore to qualify for the exact same loans I could have obtained one year ago. So, there's this beautiful opportunity for killer interest rates, and I cannot get them. It's a simple reality. And it's sort of no different than me saying that if I had bought $100,000 worth of Apple stock, I could have made $100,000 in the last month just by buying and selling Apple over and over again. Because I didn't have $100,000 to buy it, and therefore I could not make the investment. It's just hard when it's an equity that is already in your hands, but it's not worth what it was.

It seems unfair that banks have suddenly decided to adopt stricter lending policies. A year ago, I would have been all for it. Now I want them to return to their previous fiscal irresponsibility, so that I can get my good deal!

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