I am doing a topic on home loans for today's contest topic (go me!) and I realized that I have a personal story about how the banks have kind of messed themselves up by offering loans to people who shouldn't own a home.
Federal home loans are the easiest ones to get, like they are super easy but are kind of meant for the poor to get loans. Anyway, my ex husband (when we were married) got a home loan. He didn't default on the loan, he ended up selling the house. The process of buying the home was really loose, though. I'd just moved our bank accounts over to a new account and my then husband forgot and he overdrew on our old, empty account. Also, we'd just moved up from college where he'd dropped out and he'd been working his new job for less than six months. Even the federal loans require that you work at least two years, better off with the same job.
He didn't apply for a federal loan either, he got a private loan which is supposedly much more difficult to get. We paid everything on time and were never late, but it's kind of scary that the bank gave him the loan on six months work. All they wanted to see of our banking is a one month statement. We did all our banking online so its was just a print-off... that's it. It wasn't an expensive house, though, just an old foreclosure build in like 1917.
I handled the bills, so although it was his house, I made sure everything was paid every month and one thing I found was strange was that we started with paying our mortgage monthly to one company, and then our mortgage was sold to another company, and then later during the divorce it was sold to another company. This was in the course of probably a year and a half. It was a fixed home loan (I'd never get a variable) but the price each month would change because the bank made an error with the money we'd put down -- they put all the money toward the down payment and NONE toward the mortgage insurance. Since the mortgage insurance wasn't paid "at the table" it was wrapped up in our monthly payments along with the current mortgage insurance -- it's hard to explain but each payment was comprised of:
The house payment + the current month's mortgage insurance premium + back payment on the mortgage insurance that was supposed to be presented at the table. The reason the payments would change each month, however, is because we would pay more than asked each month to knock out that premium. Our plan was to do that from the get-go in order to knock out the house payment, anyway.
Did you have a strange experience with your home loan?
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