This entry of “A Single Life” is the hardest I’ve had to write so far. I’m not proud of the financial choices I’ve made. However, if my experience can serve as a cautionary tale to someone reading this, I truly hope I’ve helped.
After having owned my two-bedroom, one-bathroom townhome for slightly more than eight years, I’ve thrown in the towel. I’m short-selling it. I do it reluctantly because I can no longer continue to pay a total of $2,400 in mortgage payment and monthly homeowners’ association dues. I should not be paying this much for a two-bedroom townhouse in a north Vacaville complex with renters making up half the residents.
I hadn’t planned to buy a home in 2006. However, a fatal shooting next door to my rental home in Fairfield prompted me to move. But I did so in fear, and I shouldn’t have. (I will try to limit my “should’ve, could’ve, and would’ve” statements in this entry.) I wanted to find a place that would allow me to keep my cat, Tuffy. So, after calling several mortgage brokers, one told me that I could buy a home without a down payment. In hindsight, I file this exchange under “If something sounds too good to be true, it probably is.”
So, armed with a Fannie Mae loan, I searched in Fairfield, Vacaville, and Elk Grove until my broker steered me to the north Vacaville townhouse I call home. The 40-year, 10-years-interest-only mortgage was for the full asking price of the home – about $299,000.
Two years later, shortly after the start of the Great Recession, the value of my home plummeted to $80,000. I, along with millions of other homeowners, learned a new economic term: “underwater mortgage,” in which the mortgage amount is more than the value of the home.
In 2011, I refinanced the mortgage through the federal Home Affordability Refinance Program, or HARP, hoping to lower my monthly payments. While I received a lower interest rate, the new mortgage lender added the principal and interest, so I ended up paying nearly $100 more each month.
Late last year, the Solano County Assessor-Recorder’s Office assessed my property at $150,000. While the increased value was encouraging, the last straw came when I received my annual escrow statement. Because of an increase in the property tax and insurance, my mortgage payment went up by $150 to $1,920. Add the $280 in HOA dues, that’s $2,400 a month. (The plurality of the dues goes toward water for the lush community lawn. During a drought, even.) The increased in my mortgage payment ate into my groceries budget. I was miserable and decided to look into selling my home.
I contacted a friend of a friend from church to find out what my options are. He turned out to be a local Realtor. After discussing the pros and cons of keeping the home, I signed papers allowing him to show my home.
What the Realtor neglected to mention is that, in addition to taking still pictures of my home, he videotaped the inside of my messy home and posted it onto You Tube. Had I known that my messy house would be on the Internet, I would’ve told him, “No!” But what’s done is done.
Long story short, we received four offers and accepted one from a young couple with a toddler daughter. Now it’s up to my mortgage lender to approve the short sale. Once the approval goes through, escrow should take between 30 and 45 days, my Realtor said. In the meantime, I am searching for a pet-friendly home, preferably a house over an apartment, because I have a piano and two cats.
Right now, I’m soured on the American Dream of owning a home. I will focus on paying my bills and boosting my retirement contributions. Maybe someday I will own a home. But next time, I will put some skin in the game.