Last night, I opened my mortgage statement to find that it was $400 higher than usual... an unusual occurance, because I have a 30-year fixed-rate mortgage. Panicking and short of breath, I called my lender.
They explained that, because my lender had paid my 2007 property taxes in full, and the taxes cost more than the balance in my escrow account (the amount of your monthly mortgage payments set aside to pay your taxes), I now owe $3,000 to my lender. They decided to collect that money over the course of 12 months, which means a year of paying an extra $400 per month on top of my current mortgage payment.
Ye-ouch.
I was scared to death. My fiance and I both have good jobs, but we just bought the house in July, are getting married in May, and have a number of other bills that need paying each month. An extra $400, no matter how comfortable we thought ourselves, hurts.
I asked the customer service rep if anything could possibly be done, if we could defer the payments until we get the $7,500 first-time homebuyer tax credit we qualify for, since we purchased our home between April 2008 and July 2009. They couldn't do that, he said, but they could see if perhaps I could get the amount stretched out over 24 months instead of 12, meaning I'd be paying closer to $200 extra a month instead of $400. They have to review the request, so I have to wait until next week to find out, but they seemed to think that was a likely possibility. We're keeping our fingers crossed.
I think what made my heart stop when I saw that number was not how we'd have to tighten our belts, but how families or individuals who see something like that on their statement but CAN'T pay even $200 extra must feel. There are things my fiance and I can cut out of our budget--cable, for instance, or our fast internet connection--and still live a great life. We can rely on our various savings for a little extra when we need it. We haven't been laid off. But it's terrifying to be suddenly and unexpectedly confronted with a drastic increase in your monthly living expenses. We just sat together for awhile, feeling down, and then told ourselves and each other, "We'll get through this."
I want to stress to any of you with bills of any kind, that when you hit a bump, you should reach out to your lenders or bill collectors and calmly (as hard as it may be, because I know you're angry and scared) and work something out. A customer service rep at my lender told me over the phone this morning, "I know how lucky we are to get any money from some of our borrowers right now, because everyone is in a real pinch. We get that."
Don't let your bills stack up unopened, don't leave them unpaid and let them go to collections and damage your credit--or worse, face foreclosure or repossession on your property and things. Just take a deep breath, dial the number, and say, "I need more time" or "Is there a payment plan available?" More often than not, they'll be so glad that you called to explain, because so many Americans aren't doing that right now.