3 years ago, the husband and I took the plunge and bought a house. It was 2005, and housing was booming. Lenders were willing to loan ridiculous amounts of money. In fact, they scoffed at the “modest” amount of money the husband and I requested. They offered to loan us twice as much, but we declined; we knew how much money we made, we knew how much other debt we had, and we knew what kind of lifestyle we wanted to maintain.
And so we got a loan we could afford. We took a risk with an ARM, but even in a worst-case scenario, we knew we’d be able to afford the payments.
Silly us! If we had over-extended ourselves, we’d be able to renegotiate our loan terms. Instead of being stuck with a loan for twice as much as what our foreclosing neighbor is selling her house for, we might be able to get our principal reduced. Or get our ARM converted to a standard loan.
But, alas, we were responsible. And so there is no help for us.