Comments on: Being Honest Cost Me $9729

By: The Frugalista Files

The Frugalista Files — Wed, 19 Mar 2008 08:16:00 +0000

There’s nothing wrong with doing the right thing. You made a wise decision.

By: Amphritrite

Amphritrite — Sun, 16 Mar 2008 03:37:00 +0000

You did the right thing.

I used to be IN real estate, and you'd be surprised the number of brokers who would pull this very trick on unsuspecting people to make it look like they were getting a heck of a deal.

This can amount to insurance fraud, if you take out title insurance on your second property. It can also void your loan, meaning it's immediately due and payable. On top of it, you can get put up on charges and sued by the state for trying to get around the legal system.

Sucky business, all that. Be careful!

By: Grant

Grant — Sat, 15 Mar 2008 16:38:00 +0000

A quarter point is nothing on a second home, and $9729 is a drop in the bucket when you look at the overall interest you'll pay over the life of the loan.

And you'll sleep better at night knowing the bank can't come ding you for not claiming the property as your primary residence.

Being able to sleep soundly at night is worth a lot more than $9729, trust me.

-Grant

By: One Frugal Girl

One Frugal Girl — Sat, 15 Mar 2008 04:36:00 +0000

The anonymous commenter is correct I owe every bit of that $9729 because the home is not my primary residence. (At least not for a few more years.)

@mr. debtbeater -- I wish more parents would teach their kids the value of taking responsibility for their actions. Then maybe we wouldn't have so many irresponsible adults.

@s.b. -- I agree with your sentiment. I think a lot of other borrowers would have signed the papers and walked away with a better interest rate. But not me... I couldn't have mortgage fraud weighing on my conscience.

By: S. B.

S. B. — Sat, 15 Mar 2008 03:42:00 +0000

I agree it cost you $9729. But like others have pointed out, how much would NOT doing the right thing have cost? Perhaps more than you might think. You wouldn't have a legal leg to stand on if anything goes wrong with the mortage, and the fear of being "found out" might skew other financial decisions. For example, you might be afraid to file an insurance claim later or to refinance again, for fear that an examination of the property/mortgage could result in penalties to you. And what if your taxes are audited in detail? The IRS might find two principal residences to be very interesting!

No, you clearly did the right thing.

I'm amazed at the dishonesty that some of my friends show when money is involved. Even without factoring in the poor ethics, it always strikes me as financially unsound. For example, I have a friend who repeatedly let's his son walk into a grocery store, eat an apple in the store, and not pay. He explained to his son that "it's not a big deal because Safeway is a big, big company and $1.50 is nothing to them." So he thinks he's saving a few dollars on apples? But how much does he stand to lose when the same kid gets caught shoplifting an iPod from Wal-Mart while thinking to himself, "$200 is nothing to a company the size of Wal-Mart..."

By: Elizabeth

Elizabeth — Sat, 15 Mar 2008 01:47:00 +0000

That’s great! Great that you were honest, I mean.

By: thebaglady

thebaglady — Sat, 15 Mar 2008 01:06:00 +0000

Yup, I think it’s great that you did this, because other wise it would be mortgage fraud. You can always move into it later and get the rate reduced.

By: Mr. Debtbeater

Mr. Debtbeater — Fri, 14 Mar 2008 13:27:00 +0000

I think it’s best to take the honest approach anyway. Like anon said, trouble would have probably found you had you not done the right thing. You’d have had a longer nose before long. 😉

Reminds me of the time my kid slammed his door open on a parked car next to us. We could have just left, but we waited and arranged payment for the body work. Then I made him work it off. (well, as much as a 7 year old can “work”) It was a valuable lesson in honesty and taking responsibility for his actions. (we’d always told them to open doors slowly)

By: Anonymous

Anonymous — Fri, 14 Mar 2008 13:12:00 +0000

You did the right thing, but I’m not sure it’s fair to characterize it as having “cost you $9729.” That money wasn’t yours, right? You might have gotten away with taking the benefit, but then again designating two primary residences might have gotten you into trouble down the road.

By: calgirlfinance

calgirlfinance — Fri, 14 Mar 2008 03:07:00 +0000

It’s great to see morality in action frugal girl! Sometimes it’s easier to just take the easy way out, especially when someone else makes a mistake in your favor. I know I’ve done it before, so I commend you for your honesty.