I applied for a loan yesterday. Yep, Jimmy needs a new car, baby. Well, a truck. I want a truck, something big and mean to go up mountains and haul dirt. My original plan was to get my taxes back and use that, but what can I say? Due to the lay-off, the severance package, and my idiot decision to take my pension money and run, I'm not getting much back.
So that leaves me with Plan B. Borrowing money.
Which I hate, because it means you have to pay it back...with interest. For years!
I'm not committment phobe, I did buy a house after all, but I really, really hate to be held down by debt. The only debt I have is my mortgage, and that straddles the line between "debt" and "asset." I don't even have a credit card.
Credit cards, if you were to ask me, are one of the most evil things in existence. When I get a credit application, I immediately tear it up, but if I were to actually read it, I would ask myself, "You want me to pay you 18.5% on money I don't even have??? Plus this fee??"
No thanks.
Of course, trying to get this loan made me wonder. Why is it that when you go to banks asking for money, you're lucky if they give it to you for less than 10%, and yet when you put money into a bank, either through a certificate of deposit or an interest bearing account, you're lucky if you get a rate that approaches 4%?
I know banks are in the business of making money, but you'd think they would be a little more fair about it. They practically butt fuck you when you want money, but when the tables are turned, they suddenly become stingy. It's not right.
As for my loan, this may be a mistake, but I'm doing a home equity loan. I've been hacking at my mortgage the past year or so like a conquistador going through the Amazon, so I have a bit of bonus equity. The only problem is that during this process I discovered that the value of my house has only gone up by two thousand dollars in four years!
You hear a lot about the real estate bubble, but I don't think that's a factor in my case. No, there are two things I think are more significant.
1) I paid too much for my house. If I had it to do over, I probably wouldn't have bought this house. I probably would keep looking until I found the right one, in a decent neighborhood, in better condition, with more growth potential. As it was, I was too green and too eager to become a homeowner that I didn't even think about that stuff.
2) The lady who owned the house next door to me is a bitch. That sounds mean, but it's true. Even her own son-in-law and daughter, who were renting the house from her, moved to Minnesota to get away from her. As the house sat empty, I promised her I would mow the lawn...but as soon as she got snippy with me, I stopped. If she had paid me, I might have listened to the grousing, but since it was charity work on my part, all I wanted was a little gratitude.
Long story short, the lady rented the house out to another relative for a while, which was fine, but then he moved and the house again was vacant. For months. And since the lady was an absentee homeowner, things didn't look too good for the house. The yard was overgrown, the mice who had infested the place ran wild (and attempted to move over to my territory). It was the definition of blight.
And the lady couldn't sell the damn thing. I stole a flyer for it when it was for sale and I almost had a coronary looking at the price. You gotta be kidding me, I said! As blighted as the house was, it was at least worth twenty grand more than she was asking! At least.
As to why she didn't sell it, I have my theories. For one, she was absentee and preferred that other people handle it for her. She made no effort to spruce the place up, just stuck a sign in the lawn and hoped for the best. And the sign was in English. I suspect that if it had been en espanol, she would have sold the house in a week.
But she didn't. She left it on the market for a few months and when there were no takers, she sold it to one of those "We Buy Ugly Houses" firms. For a HUGE loss! I don't have the number in front of me, but when I looked it up on the tax assessors office, I think it was somewhere around 87K. For a house that should go for
at least 120K.
The "We Buy Ugly Houses" firm, sensing their gold mine, spent weeks renovating the place. They tore out the bathroom, the kitchen, redid the floors, put in new windows, painted it. Hell, if you bought something undervalued by over 30K, you can afford to sink some money into it.
Now I suspect the house is a rental, as it is occupied now, but the purchase price remains on the books. And since the value of your home is calculated based on the value of the homes near you, I think that absentee bitch has had a very real, and very anger inducing, effect on
my property values!
So now I'm not sure a home equity loan is the best bet, despite the fact the juicy interest (comparatively juicy) rate. I'm already fighting an uphill battle when it comes to my home value, so why make that a little steeper with more debt tied to my house?