October Equals Stress

Fall, this year, is shaping up to be just the slightest bit stressful because of decisions that I made while I was still able to read without bifocals (that would include last year but I'm not obsessed or anything). Remember when interest rates were low and the housing market was rocking? Well, I smoked some of that optimism weed and when I bought my first house as a divorcee, I chose to go for a two year ARM with a low introductory rate. I did this for a couple of reasons.

First, there was head-shaking regret that can only come when one has made an error so large that it's tombstone material. Eleven years ago, my ex-husband and I were living in an east county suburb of San Diego. I was pregnant with my son and we knew that we were going to move to Michigan to be closer to his family (must have graduated to smoking crack with that decision). He had purchased the house seven years earlier at the height of another housing boom for $160,000. It was a standard 3 bedroom, 2 bath home and there were a bunch just like it within a 10 block radius. By the time we listed the house, we were told that without a major refurb (carpet, paint, kitchen, windows and doors), the house would list for $160,000 and we would be lucky to get $155,000. My ex was beside himself and I made the suggestion that we sit on the property, rent it out and wait for the housing market to change. I tried to explain cyclical to him but he said he couldn't understand what buying a bike had to do with getting hosed on his house so I gave up, stroked my swollen belly and prayed that intelligence was passed through the maternal chromosomes.

Two years later, the house was worth over $300,000.

Today, you'd need a jumbo loan to purchase that shack.

After that financial spanking, I vowed never again to allow fear to be the deciding factor in assessing the risk of any given opportunity. So two years ago, when looking at the the cost of money, I threw the dice.

Second, I didn't have the 20% down needed to avoid PMI in a traditional 30 year fixed so I figured I'd take the lower interest rate, invest the monthly savings and sit for two years and let the house appreciate. Well, it almost worked. I'm at 14%. The trouble is, I invested most of the difference in payment each month in a mutual fund portfolio that was heavily vested in real estate paper, namely sub prime mortgages. Um, yeah...OUCH.

Now, I have to refinance by October 1st so I'll take another beating in the additional closing costs. I haven't found the perfect deal, yet, but I should be able to find something that makes me happy considering the fact that my phone has been ringing off the damn hook since I did the Lending Tree thing (just a whole pile of stupid, there). I'll save those details for another post but the process makes me want to curl up into a fetal position with a bottle of happy pills.

Did I mention that we pay our personal property and real estate taxes in October? Oh yes, and the lease on my vehicle is up October 11th with no option to renew. So, I'll be shopping for a new mortgage and a new car, paying property taxes, real estate taxes and closing costs and somewhere in there, I've got to get our flights home for Christmas.

I have a business trip to China mid October, which is usually a bit of a drag but I just know that this time, I'm going to welcome the diversion. Something tells me I'll be getting friendly with the moonshine on the flight over.