Friday, December 15, 2006

High Finance

I know this will sound strange, but it's true; I may be in escrow but I'm not sure.

I've been wanting to refinance my mortgage for the past 2 months, but it's very confusing trying to compare rates. How much extra money do you want to pay up front to get a lower rate? Will you refinance in 2 years? 5 years? 10 years? Never? Does the term escrow apply if it's just a refinance? It makes my head hurt. I called back one banker around 11:30 this morning and told him I had started the loan application he had given me, but I didn't understand parts of the form and wanted him to sit down with me to go over it. He said "that's fine, but you need to come over RIGHT NOW. We just got an announcement that rates will be changing at noon and they may be going up." Maybe he was playing the used-car-salesman trick.

The next 45 minutes were kind of a blur. I raced over there and he started asking a bunch of questions I had no answers to. "What are your annual property taxes?" "I don't know. $100? $10,000?" I have no idea. Fortunately he was able to look up most of the information for me and we got a "rate lock" submitted before noon. I don't even remember what that rate was.

Your credit score is important, although I'm still not sure exactly how it helps/hurts you. He asked me if I paid my bills on time. This is like the dentist asking if you floss; of course you lie. I did concede that I may have missed a bill every now and then. (Understatement of the year.) He ran my credit report, and I told him I felt like I was at the doctor's office waiting for test results. He told me my score was "all right". It's not good, it's not bad, it's all right. Which to me is not good.

So it seems that the rates did change while we were filling out the application, but they actually dropped a bit. The thing is, I'm not sure what they dropped to. It may not have been the interest rate that dropped, but the bank processing rates that changed. I don't know.

We finished the application and he told me just needed approval and I'd get a bunch of paperwork in the mail in about 3 days. I'd also be contacted by an appraiser. I never saw a loan summary. I never signed anything. I do not know how many points I am paying to get the rate. I do not know what the loan fees are. I do not know if I'm actually in escrow or not.

These seem like things that most grown-ups would know.

Not to worry, I have a couch your can crash on when the bank forecloses on you because you can't afford to pay the 72% interest you just commited to.
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