Owning my own home brought a sense of pride and responsibility to me. My significant other and I had a beautiful home to share with our daughters and Saint Bernard. We spent our evenings barbecuing in the back yard and our weekends playing in the front of our home. It was your all American dream.
Then the bottom fell out. The interest rate was adjustable on our loan, and we received a letter one day advising us that our rate was going up from 6.5% to 11%. This raised our payments by almost $250 a month. It was a squeeze, but we could do it. I had been a stay at home mom so I decided to begin working outside of our home to supplement our income. We floated on savings and the additional, however slight, income I brought in.
Six months later, we received another letter that our mortgage had been bought by another bank and they could not guarantee our interest rate would stay at the 11% it was at. A few days later we received a welcome packet from the new bank with our new payment and interest rate. The interest rate was up to 14% and our payment was well over our budget allowed. We thought this was predatory lending and reached out to the bank and our attorney.
Unfortunately, we had signed at closing that we understood our interest rate was adjustable up to 20%. Because we were expecting a baby when we signed and we really needed to close, we signed in a hurry and did not read the fine print, nor did our attorney tell us the adjustable rate could go so high. We had a quaint 3 bedroom 1 bathroom home in New York State and we were paying thousands of dollars a month to stay there.
We contacted the bank and asked what we could do to reduce the monthly payment. There must be something we could do to save our home. We had paid $50,000 down for this home and felt like that was wasted money. We started regretting our decision to purchase the home, wishing we had decided to rent. Was this really the American dream?
We were good people. We worked hard, raised our children to be productive and responsible citizens, and volunteered a lot of time to causes we believed in. My significant other was involved with his children from a previous marriage and went above and beyond the court ordered payments to ensure a good future for his children. Yet here we were, staring the harsh reality of homelessness in the face.
When we got the official foreclosure papers, there was no resolution. There was nothing left to do but walk away from our dream and the hefty down payment we made a mere 2 years before.
That was 5 years ago. We now rent a home in Ohio and are looking forward to home ownership one day in the future. However, we will read and understand everything we sign to ensure this never happens to our family again.