Like many homeowners, I got my escrow analysis recently on one of my investment properties (and it wasn’t one that I was doing especially well with in the first place). I’ll tell you right off the bat that it’s got a negative cashflow to begin with. Perhaps one of these days I’ll go into the whole story on why and what the long term exit strategy is.
Long story short, the payments went from $2285.84 to $2811.67.
Oh yeah… and the HOA went from $500/quarter to $533/quarter. I know this doesn’t sound like a lot, but every dollar starts to add up.
So, as of January 1, 2008, the payments have increased from $2452.61 to $2989.34. This means that my payment went up $536.73 every month. And keep in mind, I was upside down every month before. THIS HAD NOTHING TO DO WITH THE MORTGAGE ADJUSTING and I have owned this property for 19 months so there’s no first year adjustment for taxes to take into account.
My first reaction was to get angry – I mean really angry. Are you kidding me? How did this happen? So I quickly called the bank to try and figure out what was going on. They were collecting around $714 per month for taxes and insurance. This is DOUBLE what my taxes and insurance should be. [Click to Read the Full Article…]
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Here’s an interesting story. I called Indymac, the lender for my home loan. I chose a pay option arm for a few reasons. I understand the loan and use it from an investment perspective under the advise of my CPA and two. But… at any rate, I called to ask what my options were at this point with a about 18 months left on the prepay. I told them I’d like to consider refinancing the loan with them and asked if they would they be willing to work with me on the prepayment penalty. As I suspected, their answer was an emphatic, “No”.