So, in the fair Kingdom O’ Martha Points, the coffers were getting low. The peasants (read, three children and two cats) rebelled at the taxes and threatened to be revolting. A new plan was necessary.
Enter stage Right: Le Refinance.
Yes, it seemed it was time.
Now in the interest of maintaining some degree of privacy, I will not use actual numbers. I will be vague in ways designed to tell the tale without sharing actual facts.
Like politicians do. But with more potential for accuracy.
In 2006 we bought a house. Let’s say for $1,000,000. Because that’s a nice round number.
Between 2006 and 2010, things got a little iffy in the real estate market. Some of you may have noticed.
In 2008 we got a notice from the county that said that as a personal favor, they had applied a county average to the value of our house and it was now worth $1.46.
Okay okay…let’s say $500,000.
In 2009 we got another notice from the county that said “Due to further changes in the market, we will now be paying you to live in the house.”
But further depreciation had happened, let’s say to $250,000.
Our original home loan was at interest rate of eleventeen percent.
Reasonable, certainly, but with the 4000% loss on our real estate anything would be an improvement.
We watched interest rates go down, down, down…
…and when they hit -22%, we went for it!
Except that didn’t really happen.
But they got low enough that it seemed worth it to refinance.
Now pay attention, here’s where things get interesting…
In order to get the loan without points, the loan-to-value ratio needed to be 80-20.
So that meant that the value of the house on appraisal needed to be somewhere near 4 trillion dollars.
Give or take a bit.
Except that the county had appraised the house at the same value as your average chicken coop.
It was going to be quite the feat to bridge the gap between chicken coop and 4 trillion dollars.
So we cleaned and scrubbed. Fixed and mended. Polished and buffed.
Things sparkled in this house that have not sparkled since the Carter administration.
Trying to close that gap between the county valued chicken coop and the 4 trillion dollar target.
The appraiser came on Wednesday.
We waited…and waited…and waited.
And on Friday we got the word.
He put words in his appraisal like “meticulously maintained and updated.”
At first the mortgage broker said that we hadn’t quite hit the target. And hadn’t actually reached 80:20 loan to value.
I argued. And threw large words around like “unhappy,” and “not satisfied.”
The mortgage broker re-checked his figures.
And lo and behold…80:20 loan to value!
Which meant those nasty points didn’t apply to us.
We spent Friday afternoon feeling smug and superior.
Until we remembered that 4 trillion dollars was just an imaginary number, and the house is still worth much less than we paid for it.
You’d think that there simply isn’t enough cognitive dissonance in the world to bridge the gap between what we paid for and what it’s worth now.
But you’d be wrong. We’re good gap bridgers, Himself and I.