But that’s not what this post is about, per se. Rather, today I want to talk about fairness.
We hear Obama talking about how he wants “…millionaires and billionaires to pay their fair share.” Never mind that the top 10% of income earners pay in the neighborhood of 70% of all federal income taxes.
The “fair share” argument is absurd on its face.
Still, Obama and his leftist minions persist.
Well, here’s a real story about fairness.
Today, I’m going to open the kimono a little, with a real life example…
My wife and I did everything right. When we got married, we both owned our own homes. I had a condo and she had a small town house. The year we married, we both sold our respective homes so that we would have enough to buy our new “family” home together.
When we bought our house – the house I am writing from today – we made a 30% down payment.
Still, we took a big loan – we got a 30 year fixed rate at 6 3/8%.
The mortgage lender gave us various options for us to get a lower payment.
We figured that 6 3/8% is great historically and we’ll be set for as long as we need. Our payment will never get bigger.
Our monthly payment is $3,000.00.
Fast forward 7 years. Today, we are one of the few people with equity in our home. We’re on top by about $55,000.00, according to area comps, and various market estimates.
Here’s the problem: Both my wife and I are self employed. Although we have always paid our mortgage on time, we don’t show the income necessary to get a new mortgage.
I went online to look at new houses recently. I found a beautiful four bedroom house in a golf community. This house is right on the golf course – long a dream of mine. The house is listed for $500,000.00.
If I sold my house and had $55,000.00 in cash, I could put a 10% down payment on the new house. At today’s interest rates, my payment would be around $2,200.00 – $800.00 LESS than my current payment on my 30 year fixed loan.
You’d think any bank would jump at the chance to secure a new loan with an old customer, secure 30 new years of a loan that would be less risky, in terms of the amount we’re responsible for each month.
No chance in hell.
First, because we’re self-employed, we show a much smaller income due to various write-offs and expenses. Second, with only 10% down, banks won’t even talk to us.
Forget about the new house on the golf course. How about just refinancing the $359,000.00 left on our existing mortgage?
Again, self-employed, not enough bottom line take home. It’s as if the banks are oblivious to how self-eployment actually works, but I digress.
We did everything right…
- We got a 30 year fixed rate, when we could have saved $1,000 a month with some gimmick
- We put down the maximum down payment of over 30%
- I opted to start my own business in the face of a layoff back in 2009
A big F*#k You from the banks.
I don’t even fault the banks. I fault the government. If they had not stepped in with their absurd plot to put low income deadbeats into homes they couldn’t afford, none of the housing problems would have happened in the first place, save for ordinary market cycles.
And all those people who sold short, defaulted on payments, used government programs to refinance…all those assholes are sitting pretty. We did it right and played by the rules, and we’re stuck with an interest rate twice what it should be.
I suppose we’re okay. Since we make good decisions and work hard, we’ll always be alright.
But you know what? This shit ain’t fair.