A Freelancer's Out-of-the-Box View of Traditional Mortgage Refinancing (Not Just for Freelancers But for Anyone Who Owns a Home)

First, the term "freelancer" should give you several hints. Like, for instance, I don't make $1,000 (or any other figure you may choose) twice a month. I don't have automatic deposits of this fictional $1,000 on the first and the fifteenth into my bank account. Some months I don't make any money. Other months I make enough to cover the next month as well. Most months I make enough to cover my bills for that particular thirty-day period.

Second, sometimes the term "freelancer" is synonymous with "broke." But it's only a temporary state of brokeness. As a freelancer, you just don't know how long that period will last.

You need guts and faith and determination to succeed when self-employed.

I love working for myself and count any financial hardships as part of the job. In other words, I'm not all about the money. Only enough to pay my bills. Even to the point of working a second (and, at one time, a third) job too. So keep that in mind if you wish to follow my lead to become a freelancer.

However, my findings below could be of great help to a homeowner with a traditional day job too.

Third, I'm no financial guru, just a working gal with years of experience in the trenches. What follows is my most recent learning opportunity.

This idea to refi all started with something I saw online about HARP ending this year (not that it can't be renewed for another year but you'll have to check that out for yourself). But I don't qualify for HARP as my current mortgage is a conventional loan, not a Fannie Mae or a Freddie Mac (a government-issued/approved loan).

I then checked out HAMP, but I don't qualify for that either as it seems to be for those "underwater" folks (meaning, their mortgages are upside down, owing more than what the property is currently worth on the market), while I am grossly "overwater" (my own term, BTW; meaning, I owe way, way, WAY less than the current market value of my property, whether going by Zestimate or by my local county tax assessor).

And I want to keep my house in the family, even when I die, passing it on as a hopefully paid-for asset, so what little I know about reverse mortgages doesn't work for me. But, if any of you are interested in that vehicle, you'll need to conduct your own research and due diligence.

So I recently tried to refi my mortgage at my small local bank (not one of the big countrywide chains) to get a much better interest rate and to lower my monthly payment. However, as a freelancer, I couldn't easily qualify, like when I worked as a legal assistant (with consistent and equal income payments), at the time I originally bought this property, as a first-time homeowner. And it seems banks tend to look to refis as debts to sell, mostly to those entities seeking loans which meet the government standards of Fannie Mae or Freddie Mac funding.

Therefore, my back-end ratio (based on my current mortgage payment) was excessive and threw me out of consideration for any refi (from any bank at least) even though my front-end ratio (based on any new mortgage payment) was in the barely acceptable range.

Yet I'm shaking my head. Regardless of the ratios, I'm making those mortgage payments that the banks/government deem me unreliable to make. And for the last eighteen years at the same address.

Sigh.

AND, like I mentioned above, my current mortgage balance is way below market value, almost a full one-third of what my property lists for today per Zestimate. Regardless of its market value or its Zestimate valuation, this land is where I plan to live for the rest of my life. Obviously having property as an asset for a mortgage loan is immaterial in the bank's point of view, which is mind-boggling at first glance.

Even the taunt of repossessing my home, should I fail to make those mortgage payments (as predetermined by faulty ratios used by banks) and for seven months in a row (as per a quick internet search into what constitutes foreclosure factors), isn't enough of a lure to induce banks to lend me the money. Even with a $4,000 "hickey" (from my viewpoint) earned up front by the lending bank.

Still shaking my head ...

Which makes me think the banks are more interested in a guaranteed payment of a fixed amount each month.

Hmm.

Kinda like what I would want too in my own business.

Plus, per my local bank  (not one of the big chains either), I would have to double this year's income in order to be considered for a refi to meet those needed ratios.

YET, when I figure out how to pay off this current mortgage in six years (an acceleration for sure), I only need $418 more than my normal payment a month (to start with) to accomplish this. Granted, I should add roughly $1.17 to this principal-only extra payment figure and increase it by at least $0.03 each month to keep in alignment with an online amortization schedule (or so it appears by a comparison of my last three monthly mortgage statements).

In my mind, this converts my current high interest rate on my mortgage into a much more pleasing "net" rate of interest (by saving years' worth of interest payments).

This seems more feasible to me, and I am currently researching flexible online work to accomplish this (consider this my second job) which still allows me the time I need to focus foremost on copyediting projects (my first job). I have also reframed my mind-set as to this second-job search about being something to help me get out from under my mortgage faster.

Like I wrote in my last blog post, seek those long-term fixes (paying off your mortgage as early as possible) over the short-term (a refi, with fixed fees of about $4,000 added in from the very first, per my bank anyway). That $4,000 figure was enough to dissuade me from any refi option. I have worked too hard to pay down my mortgage to have this much added back in.

No. That doesn't work for me, not with my situation. Neither does a second mortgage. So, if you ever consider a refi, rethink your options as to paying off your current mortgage earlier.

Such are the random thoughts of this freelancer as to the traditional refi process in the States.

Not having a mortgage payment would be a big boon to any freelancer or to any 9-to-5 worker alike. Granted, I'll still have to pay insurance on my home. I'll still have to pay property taxes. But I'm paying them anyway. And I'll save much more money by paying off my mortgage.

Wish me luck.

Welcome to My World, Where Every Day Is a Saturday

Denise Barker, Author, Blogger, Copy Editor
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A Freelancer's Life: Menu Ideas for All "Seasons"

As a freelancer, I never know how much money is coming in this month or the next. So I have to accommodate. And, in this economy, even hourly and salaried people may be feeling the pinch as well.

Remember too that the terms rich and poor are relative. What is one man's poor season would be considered rich to another. Plus both are subject to fluctuations.

With that in mind, here are some ideas at three different levels of expense:

Po'Boy Meals

1. Ramen noodles ($2.09 for 12 or $0.174/pkg at Aldi's in the DFW area, one serving)
2. Baked potato, butter, S&P (10# at Aldi's for $1.29 w/~25 spuds per bag = $0.05/one serving, not counting butter and S&P)
3. Rice (10# at Aldi's for $5.29 or ~23.5 cups, where 1 c. = $0.225/per cup, could be 1 or 2 servings)
4. Pasta (egg noodles, $1.00 at box store, makes ~4 servings), add butter, S&P, Parmesan, as available = $0.25/serving (not counting extras)
5. Oatmeal (per Internet search: $3.47 to $4.80, whether quick cooking or original, with 30 servings each) = $0.12 to $0.16/serving
6. Eggs ($1.19 for a dozen large or $0.099/egg at Aldi's; so you could, in theory, eat ten scrambled eggs for less than a dollar)

I've had fun eating all these foods, as everything on this list was denied me at some point as I cleaned up my diet. Moreover these one-item meals allow you to easily detect allergies to food additives because these carbs (or protein when speaking of eggs) stick with you for well over three hours before you eat something else to muddy the source of your sensitivity reactions.

I've had horrible itchy eye symptoms to three products listing "natural flavorings" (instead of its true name, MSG): canned Texas-style beans, green tea in a jug and butter (weird). It had to be the butter because I put it on a baked russet potato along with S&P. I doubt the potatoes have MSG added to them; my salt lists only the one item; the ground black pepper has no list of ingredients. Thereafter, when I put olive oil on my potato in lieu of the butter, I had no such reaction.

I think the generic brand of those beans doesn't add MSG, no matter its name, so I'll not be buying the brand name for now. I'm checking out other teas to substitute for this particular one that affects me so. As for the butter, if you'll check the labels when you shop next, you may see what I saw. The unsalted kind, from two different brands, each had MSG added to them under the guise of "natural flavorings," whereas the salted versions did not.

Go figure.

In addition to the menus listed above, I would suggest buying whatever seasonal fruit is on sale, whether a 3-lb. bag of mixed apples, or like grapefruit and oranges during the winter. Same thing with produce. When you can, buy a good quality lettuce (not iceberg) or a 3-lb. bag of onions to add a little variety to the starches listed above. Summer is a great time to get four or five ears of corn for one dollar.

Note that, while I am completely off my diet eating these carbs, I only gained back five pounds eating this way, over the holiday season too. I was surprised it wasn't more. And I haven't yet resumed my daily exercise either, other than yard work (raking leaves; pruning trees damaged by our recent ice storm), to offset this. So I can see me losing the weight (again), maybe even while eating these carbs, once I reincorporate weight lifting and yoga into my daily routine.

Almost There

1. Ramen noodles (two pkgs = $0.34) with tuna ($0.65/can at Aldi's); total = $0.45 each for 2 servings
2. Baked potatoes and canned beans—although, of course, dried is cheaper, maybe fresh too ($0.05/potato + $0.49 for 1 can, 2 servings, green beans; per serving = $0.245); total = $0.295/serving
3. Rice and beans (could be ~$0.33 with canned beans per serving; less with dried beans you cook yourself)
4. Corn bread (Jiffy brand is $0.59/box online, ~3 servings) and canned collard greens (Glory Foods' seasoned greens, 27 oz., 3 huge servings or $0.496 x 3 = $1.49/can); total = $0.696/serving [Again this meal would be cheaper to buy the fresh collard greens and cook them yourself; but the canned are nice to have because their shelf life is longer than the fresh version in the refrigerator.]

With any of the above, you get to have two items together on the same plate. Almost there...

Meat!

Here's my favorite idea. Roast a meat—whether a beef roast, a whole chicken, a brisket, a pork roast; whatever you like and can afford—and eat it over the week to come. I'll use chicken as my example.

I got a wonderful whole chicken at Aldi's. Don't have the packaging any longer so have no idea what brand it was. [Note: Aldi's has brands I've never heard of before, but each one that I've tried has been great, and some are one-third the cost of what I pay for the same thing at the big box store. A quick Internet search states several are Trader Joe's brands.]

So the chicken was delicious and about $0.99/lb (4.8-pound chicken for $4.56). I seasoned it with EVOO and herbs of my choice, and then roasted it with just what I had on hand: celery and onions. 

This was the biggest chicken I had bought in a long time (and the cheapest), with four servings from the two breasts alone. Then I deboned the meat and used just the white meat to make jambalaya, with browned beef sausage, sliced, added to it. Got another 4 servings from that. After deboning, I made chicken broth from the bones, letting it simmer on the stovetop for hours. That could be used, once strained, for chicken tortilla soup. Yum!

Granted, you will be eating chicken in some form almost all week for one or two meals daily (depending on serving sizes and how many people are eating each time), but hopefully these variations will keep you from being bored with the idea of chicken yet again.

Using the dark meat, I plan to make chicken spaghetti. It's simple and calls for one can of cream of celery soup and another can of cream of chicken soup (or cream of mushroom even). Mix them together, with a little water, pour over cooked spaghetti and the leftover chicken. Mix well. Top with cheese and pop in the oven to warm all. Delish!

But I'm not purchasing canned soups and will instead thicken my homemade chicken broth with corn starch, adding chopped fresh celery (slightly cooked) along with canned mushrooms, both of which are already in my kitchen.

Even if you have just a little chicken still remaining after fixing all of the above, that small bit calls for soup. And for you to empty out your fridge. That leftover rice? Add it. Have wilted lettuce? Drop it in. Bread? Throw it in the mix. The classic French onion soup has bread atop it. Italians make a bread salad.

Don't waste anything that's still good. A bell pepper may be old enough that it won't be a good raw snack, but you can season your soup with it. Every ethnic group has a version of this, whether it's called goulash or hash or whatever. Clean out your fridge and put what you can in the soup pot.

Schedule one night of the week as potluck. Even if it is baked potatoes stuffed with cooked broccoli and the last of the cream cheese. Be inventive.

Inspiration

I'll leave you with three quotes which hopefully uplift you during the hard times.

First, from the Bible. A widow was about to lose her two sons to indentured slavery to pay off her dead husband's debts. Taken from 2 Kings 4:1–7 (KJV). Read carefully what the man of God told her in the second verse:

And Elisha said unto her, What shall I do for thee? Tell me, what hast thou in the house? And she said, Thine handmaid hath not any thing in the house, save a pot of oil.

And he proceeded to tell her what to do. She and her sons followed his instructions, pouring the never-ending oil into additional urns or containers of all sorts procured from her neighbors. When there were no more empty pots, there was no more oil to pour (a story in itself). She then sold it all, paid the debt, and she and her sons lived off the rest.

My point is: what do you have right now? Maybe clothes that can be dropped off at the consignment shop? How about something to sell on eBay, such as movies you don't watch any longer? If it works for you and your situation, sell your car and buy a second-hand bicycle instead. Have a garage sale.

What do you have in your house? Look through the eyes of someone in a situation worse than yours. See how rich you truly are. Sell what you can. Give away some things. Be grateful for everything you do have.

Donations to your local shelter may not put money in your hand but it puts credits in your spiritual account. And God honors that.

Second, from Michael Pollan in his book In Defense of Food: An Eater’s Manifesto.

He showed the words chocolate cake to a group of Americans and recorded their word associations. Guilt was the top response. If that strikes you as unexceptional, consider the response of French eaters to the same prompt: celebration. 

Third, from Oprah Winfrey.

I know for sure that what we dwell on is who we become.

Change your thoughts and you change your life. Plus, aren't you happier when you think on the good things?

Here's to abundant happiness...

P.S. I'm not getting paid or otherwise compensated to mention any brand names herein. I just happen to like these.

"If your vocation isn’t a vacation, then quit, leap, change careers."

Denise Barker, Author, Blogger, Copy Editor
Books that Build Character(s)

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What lies behind you and what lies in front of you pales in comparison to what lies inside of you. Ralph Waldo Emerson
When you give someone a book, you don’t give him just paper, ink, and glue.  You give him the possibility of a whole new life. Christopher Morley
The best inheritance you can leave your kids is an example of how to live a full and meaningful life. Dan Zadra

Every Day That I Work for Myself, I Am Rich

I wrote about this before. One post I found is here http://livingthedreampublishing.blogspot.com/2012/09/i-am-so-blessed.html although I thought I had been much more poetic than that. Maybe there is another post where I was (ha!).

But early this morning I read Barbara Conelli's "Today, I'm Rich" here: http://barbaraconelliblog.com/2012/11/27/travel-writers-diary-today-im-rich/ and she wrote it all so beautifully, said everything I wished I had said, and I so want you all to embrace this happy freedom, that I have to share her words.

Oh, here is another one of mine to check out at http://livingthedreampublishing.blogspot.com/2012/02/like-you-are-on-vacation.html. Still not as perfect and as succinct and as rhythmic as Barbara's, though.

Not that we all have to be freelancers and authors, like Barbara and me. But we all should be ecstatic about the work we do, day after day, hour by hour, second to second.

If you are already there, you are truly blessed, wealthy and happy.

I wish that for everyone.

Can you imagine our world if every single person on the planet was enthused about their work? Think how that would spill over into their home life, their dealings with strangers, their outlook on life in general, their hopes, their dreams, their goals.

I look forward to seeing that world in my lifetime.

Denise Barker, author + blogger + copy editor

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