It’s been almost five years now since we purchased our first home. At that time, prices had fallen from their former peak in our area, and we had moved our train of thought from “we just won’t able to be able to purchase a house anytime in the near future” to “a house may actually be in reach.” When we purchased, word was that prices and interest rates were likely to jump back up soon, so we’d better hop to it.
So, we committed. We bought a house. Our payments ended up being several hundred dollars more than we had anticipated during the escrow process, but we were packed and we figured we’d eventually get raises and it would be worth it to scrimp for awhile — or at least until we could refinance.
As it turns out though, the opportunity to refinance would not come along. Nor would raises with the current economy. And the prices actually did continue to drop. We continued to make our payments of course, because that was what we committed to do and we’d never skipped out on a financial commitment, nor did we intend to.
Every few months, I called the mortgage company or government provided help lines for homeowners to look into whether we qualified for any programs that were being offered to people in our situation. We would get led on a wild goose chase, do massive quantities of paperwork, wait on hold on calls for hours only to repeatedly be told we made too much money. (Funny, as the income estimates were always based on gross pay. When have we EVER seen our gross pay? Has anyone?) After more than 12 periods over 4 years (each several weeks in length) of attempting to find a solution, I resigned to accepting the reality — we were stuck with an overpriced mortgage on a home we’d paid over $100,000 in payments towards, yet owned not a single square inch of.
Let me repeat that. We paid over $100,000 towards our house yet had NO equity.
Welcome to the housing crisis. We pressed on, like thousands of others. Paying the bills and throwing our money down a seemingly endless pit.
By the time our house value fell to only 48% of what we’d paid for it — things started hitting the fan.
My husband’s employer had no choice but to put employees on a 20% furlough indefinitely due to market conditions. Our home began to deteriorate, but we didn’t have the money to make necessary repairs or updates. Things broke and stayed broken. Then, we went through two unexpected major medical emergencies. (Can you say “high deductibles”?)
The time had come to make some difficult decisions. It was time to consider a short sale.
[Click here for part 2 of 2]
[featured images via blog.al.com and lindagranger]