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

[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)