My Day - and it's only 10:45

[garnigal]

I've been looking forward to today for a month. Turns out it sucks.

We accepted an offer on the townhouse in early December. We'd been carrying 2 places for 6 months, so even though it was ten grand less than our previously agreed upon lowest price, it seemed like a decent deal. And really, it is. It's in line with other prices in the condo development, just 10 grand lower because of the market.

Anyway, today is the closing. We were supposed to have enough to pay back my mom the money she loaned us as a down payment on the new place (essentially a home equity loan) with a little ($500 or so) left over. Basically, today was our fresh start - debts zeroed out, money in the bank.

Except I forgot something in my calculations - penalty for paying off the mortgage.

The mortgage company finally sent the payout today - $9300 in penalties. We were figuring about $103,000 to the mortgage company, but with the penalties, it's $112,000ish. Which means we are $9000 short on Mom. Which means we still have debt and there's nothing left over.

I just keep reminding myself that we did make money on the house. We did get the house we wanted (and we'll never have to sell and move again). Our loan is to Mom, so we've got flexible repayment terms.

It's just not how I was hoping today would go.

Comments

[married-n-mich.livejournal.com]

I rank buying a house as one of the MOST stressful things one can do. I put it about getting married.

And I feel your pain. I am SO tired of being in debt *Hugs*

[garnigal.livejournal.com]

There have definitely been some arguments over the houses, but we managed to get through it, hopefully better than when we started.

And even today wasn't so bad. It wasn't what I'd hoped, but it could have been much worse.

[married-n-mich.livejournal.com]

Its not so much the agruments. Its the stress and the self doubt and the blah, blah, blah....

[garnigal.livejournal.com]

Oh yeah. And the dealing with family who want to help, but their bull in a china shop methods leaving everyone more stressed than when we started.

[married-n-mich.livejournal.com]

Yep

[jerusha]

Oh, man, that does suck. *hugs*

[garnigal.livejournal.com]

Thanks for the sympathy. I try to keep looking on the bright side - we are paying off most of our debt, we're getting out from under the second mortgage and the insurance, hydro etc etc etc.

We'll be fine, just not as quickly as I'd hoped.

[saratinia.livejournal.com]

Did you not get your mortgage from the same people - I ask because at my bank they wave their fees if I sign another mortgage for an equal or lesser amount ie: in this case I would not have any fees.

Sorry if that is not the case and this tastes salty.

[garnigal.livejournal.com]

We decided to go with a different bank this time - much better rates and way better service. Our first mortgage was with an Alberta mortgage company, because I was fairly high risk back then - 1 income, only out of school for 2 years. We also wanted to roll our property taxes in with our mortgage payment, which the old company didn't do.

On the plus side, we only have 1 house now!

[jj-yo.livejournal.com]

that sucks for sure!!!!!

[garnigal.livejournal.com]

It does, but at least it's over. It was still the right choice for us, even if my math was little more optimistic than reality.

[spiralleds.livejournal.com]

They hit you with fees for paying off the mortgage early??? Grrrr. That's just wrong, even if legal.

But the good news is that you've got the monkey of the second mortgage off your back.

[whatawookie.livejournal.com]

It's not illegal at all, it's written in the contract. They want your mortgage as income for the next 25+ years... they loose money if you pay off early. However, if you're staying with the same company for your next mortgage, it is unusual to be paying the full amount of penalty, if any.

[spiralleds.livejournal.com]

I agree; it's not illegal. It just burns me because not all mortgages do that, and the ones that do often don't point out that little detail on the front end as you're signing pages and pages of fine print.

[garnigal.livejournal.com]

I took the mortgage paperwork in to the lawyer first thing, to see if they could find any loopholes in the language, since our lawyer called us to make sure we knew how high the penalties were. No dice.

The thing that burns my ass is they changed the wording from the original agreement in 2002 to the renewel in 2007 - it had originally been 3 months interest.

[garnigal.livejournal.com]

Indeed, there is a silver lining. I wish I'd read the renewal more closely a year ago - that's when they changed the rules on prepayment in full. Originally it had been 3 months interest.

[spiralleds.livejournal.com]

Don't kick yourself too hard. My cynical side says that they live to sneak that kind of nonsense into agreements.

I'm pretty feeling 'there but by the grace of God' that something similar didn't happen to me when took out my loan/refinanced it. Particularly after the whole cratering of our housing market due in large part to people getting into loans they didn't understand/were kept from understanding. I'm now far more suspicious of the housing loan system than I was before.

[garnigal.livejournal.com]

Yeah, you are so right. What seems obvious to me (don't screw someone who's already been a good customer for 5 years) is the opposite of what the banks think.

Hopefully we'll never have to sell this place (at least not until the mortgage is paid off) or any other place we buy (we're thinking of a cottage in a few years)

[whatawookie.livejournal.com]

Is the mortgage with the same people? If it is not, then you are probably screwed up the ass... they have no obligation to reduce your penalities. If it is, I'd be threatening to move to a different company because that is a shit-tastic way to treat a customer.

[maes.livejournal.com]

No, we changed to a real mortgage company instead of this horrible extortionist company. They did not give us favourable rates in any way before and their exorbitant rates are actually the reason why our penalty is so high. The break fee is the difference between their rate and the Canada Savings Bond rate on the day the mortgage gets paid down... not the prime rate, not the CSB rate when the mortgage was renegotiated...

I hope they rot in hell.

[smwright.livejournal.com]

Ouch! *hugs* I am so very sorry.

[garnigal.livejournal.com]

It could have been much worse, given the real estate market. And at least we borrowed from Mom, who understands how these things go.

[smwright.livejournal.com]

That's a very positive outlook. :)

[garnigal.livejournal.com]

We've been in a lot of financial black holes and always managed to claw our way back out, so I have a lot of experience at looking on the bright side.

Plus it helps to have so many people offering sympathy. :)

[smwright.livejournal.com]

*chuckles* I'm familiar, and sympathy certainly helps. :)

[ares132006.livejournal.com]

I feel for you and your frustration. It always depends on the mortgage contract. Some mortgages (like ours) don't have penalties for early settlement. However, when the interest rates were rising (off the charts last year) people scrambled to take out Fixed Interest mortgages. (Like my nephew) The fixed theirs at 8 point something b/c rates were going, and did go, into the 9 point something. Then the financial crisis hit and interest rates and mortgage rates plummeted. It now stands at around 5%. We have a variable so we benefit. My nephew is stuck at 8 point something for the next 5 years. He would have been laughing if it had gone the other way. His settlement fee is too high to get out. Something near to $20,000. It is their first home and they have only been in it less than a year.

I'm glad that you don't have too much to worry about, in any event. I'm sure your Mum will understand.

Hugs

[garnigal.livejournal.com]

Yeah, we went with variable rates for the new house. We haven't read the fine print on what it would cost us to get out, but hopefully we never have to get out.

Your nephew must be so frustrated, but I guess that's life. There's always renegotiation a few years down the road.