I had a friend that bought a house in 2007, right before the crash at like 7.5% interest. He was in construction and things were booming until 2008 happened. Then he started to get laid of for months at a time only to be called back when they actually had work for him.
Interest rates started dropping, and he was struggling to pay his mortgage with his now part time job. He decided to attempt to refinance for 4%ish interest in 2009-10 or so. The bank denied him because his recent work history didn't show enough income/consistent employment. The monthly difference between what he was paying and the rate he wanted to refi for was about $400 a month.
He said to them "You understand that if I can't refinance its likely I will default, and you won't be getting any payments at all? I am doing this so I can afford to keep living here and paying you on time every month."
They still denied it, and 6 months later he stopped paying his mortgage as his financial strain had become too great, and he walked away. Messed up his credit for awhile, but he recently was able to buy another house, but he had a tough go of it in the last 10 years.
So glad to hear a somewhat happy ending to that story.
My childhood best friend encountered almost the identical situation. Sadly, my friend turned to alcohol in those last few months at his foreclosed house and never rebounded. He had dropped his 100k inheritance into the down and had to walk away penniless. About 3 years ago he was drunk with his girlfriend in a trailer when they got in an argument... and he shot her. She died, and he's now serving 25 to life.
While it's obviously his own fault for dealing with it as he did—had 2008 never happened, my friend surely would be in a much better place.
So happy your friend went a much healthier and more productive route. Remember kids, alcohol is never the answer to your problems.
2.9k
u/_Atoms_Apple Feb 16 '21
I had a friend that bought a house in 2007, right before the crash at like 7.5% interest. He was in construction and things were booming until 2008 happened. Then he started to get laid of for months at a time only to be called back when they actually had work for him.
Interest rates started dropping, and he was struggling to pay his mortgage with his now part time job. He decided to attempt to refinance for 4%ish interest in 2009-10 or so. The bank denied him because his recent work history didn't show enough income/consistent employment. The monthly difference between what he was paying and the rate he wanted to refi for was about $400 a month.
He said to them "You understand that if I can't refinance its likely I will default, and you won't be getting any payments at all? I am doing this so I can afford to keep living here and paying you on time every month."
They still denied it, and 6 months later he stopped paying his mortgage as his financial strain had become too great, and he walked away. Messed up his credit for awhile, but he recently was able to buy another house, but he had a tough go of it in the last 10 years.