I thought from the day I bought my house I had a fixed rate. A few months later I even paid down the interest for several thousand dollars. Then about May 2007 I get a notice from my mortgage company warning me about a increase in my mortgage interest rate. I literally laughed and thought it was some company trying to get my money. I couldnt have been more wrong. They immediately faxed me the document I signed that showed my signature on a document i signed when I bought the house about an ARM adjustment after 2years.
I attempted to refinance, but my rate jumped up before I knew it, my first mortgage alone went up over $1400 per month. That was in July 2007. Since that month, I have went through dozens of mortgage companies. I even worked at a local store fixing computers for several months working 35hrs/week there on top of my full career for $8/hr, and started working other at home jobs to make ends meet. my credit score dove from near 700 to high 500s in 2 months! I learned that "its not all about your credit score, its more with your debt to income ratio", DTI. Eventually, the companies I called would just straight up ask, "ok, lets cut to the chase, what was the DTI you got from your last company?"... and I would say, 59%. And if they didnt hang up, the kindly told me "highest we do is 40%", or 45%. Very few would do any higher.
This is when I realized why it was called the "ARM trap". Your credit score plunges. Your DTI of course takes a dump, of course. It seemed that no one could understand that "well, of course my DTI jumped, yours would too if you had to pay additional $1400 in fees per month."
Well, I had only a handful of companies that actually REALLY tried to help. Very optimistic. And after a few weeks, or a month, at the end it was a "I tried, your DTI is too high". The funniest being "ok, good news! all you have to do is fax me a document stating when you start your next better job or when you get your pay raise." And the guy before him was so optimistic he told me to pay for the appraisal as he was so sure to refinance me... I wasted $350, he failed.
At the end, right before my fee would get raised another $200, someone finally came through. to my surprise, it was someone local in SoMD. Instead of just refinancing me, he wants to work with me for the next 6months-1yr in helping my financial future. But as he found earlier when he pulled my credit report, I did not have any major financial problems. "Youre more into your finances than most of my clients". I never been late, never missed a payment. The only thing was high credit card balances ( I was using them to pay bills as I simply couldnt without them). It was the sharp increase of the mortgage alone that killed my score and drove my DTI so high that no one would take a risk on me.
If youre still looking for someone to help you get out of the "ARM trap", keep your head up, and keep calling around, theres someone out there that can help. I have been able to sleep at night better since I got help. I was worried 24/7, as anyone would... $1400 fee every month is no joke. I literally would come home every day from work and be on the phone until 10-11pm talking with a loan officer or underwriter. My wife no longer has to spend her day away from the little ones trying to make money from home. Im not on the phone while theyre eating dinner anymore.
I attempted to refinance, but my rate jumped up before I knew it, my first mortgage alone went up over $1400 per month. That was in July 2007. Since that month, I have went through dozens of mortgage companies. I even worked at a local store fixing computers for several months working 35hrs/week there on top of my full career for $8/hr, and started working other at home jobs to make ends meet. my credit score dove from near 700 to high 500s in 2 months! I learned that "its not all about your credit score, its more with your debt to income ratio", DTI. Eventually, the companies I called would just straight up ask, "ok, lets cut to the chase, what was the DTI you got from your last company?"... and I would say, 59%. And if they didnt hang up, the kindly told me "highest we do is 40%", or 45%. Very few would do any higher.
This is when I realized why it was called the "ARM trap". Your credit score plunges. Your DTI of course takes a dump, of course. It seemed that no one could understand that "well, of course my DTI jumped, yours would too if you had to pay additional $1400 in fees per month."
Well, I had only a handful of companies that actually REALLY tried to help. Very optimistic. And after a few weeks, or a month, at the end it was a "I tried, your DTI is too high". The funniest being "ok, good news! all you have to do is fax me a document stating when you start your next better job or when you get your pay raise." And the guy before him was so optimistic he told me to pay for the appraisal as he was so sure to refinance me... I wasted $350, he failed.
At the end, right before my fee would get raised another $200, someone finally came through. to my surprise, it was someone local in SoMD. Instead of just refinancing me, he wants to work with me for the next 6months-1yr in helping my financial future. But as he found earlier when he pulled my credit report, I did not have any major financial problems. "Youre more into your finances than most of my clients". I never been late, never missed a payment. The only thing was high credit card balances ( I was using them to pay bills as I simply couldnt without them). It was the sharp increase of the mortgage alone that killed my score and drove my DTI so high that no one would take a risk on me.
If youre still looking for someone to help you get out of the "ARM trap", keep your head up, and keep calling around, theres someone out there that can help. I have been able to sleep at night better since I got help. I was worried 24/7, as anyone would... $1400 fee every month is no joke. I literally would come home every day from work and be on the phone until 10-11pm talking with a loan officer or underwriter. My wife no longer has to spend her day away from the little ones trying to make money from home. Im not on the phone while theyre eating dinner anymore.
It's not a trap at all. Why do people sign things so important without so much as reading it? 
Maybe keep the job a bit longer and take that 1400 a month and pay down your debt and restock your ESF. 
Those of us who actually take the time to learn about how things like this work can smell the whiney, "poor swindled me" 
a mile away. 
In fact, I'm wonderful!! 
") just had to buy a house and didn't care what they signed. But now they're paying the price for it. 
Good on ya, Mikey! When I finished my taxes the other night and looked 'em over, it was amazing to see how much deductions like mortgage interest and property taxes reduce your taxable income. The child care deductions were a drop in the bucket compared to the others. 
I love the experts