Posted on: 30th Sep, 2011 12:57 am
Hi there… I'm facing problems in paying off my mortgage debt. While I was talking with my lender regarding this, he was talking about re-amortizing my loan. What does re-amortizing a loan mean?
As far as I know, re-amortization can be defined as the recalculation of a loan's principle and interest payment. However, this does not include the changing of the interest rate or term of the loan. It is done mostly in case of a large principle reduction payment. It is allowed by some servicers, but not all. However, the borrower may be charged a modification fee.
Hello,
The Federal Government bailout program provides the banks with at least two programs I know of. One is call HAMP and the other is HARP.
You may want to talk with your current lender about these.
What the HAMP program does is it reamortize's your mortgage for an extend period up to 40 years. Also they lower your interest rate for a short period of time. Furthermore, they give you incentives for making your payments on time by reducing you principal over a 5 year period.
Both programs are under what is called the Making Home Affordable which is designed to help keep people in their homes by making monthly payments more affordable.
Hope this helps,
Jeffrey Ragan
The Federal Government bailout program provides the banks with at least two programs I know of. One is call HAMP and the other is HARP.
You may want to talk with your current lender about these.
What the HAMP program does is it reamortize's your mortgage for an extend period up to 40 years. Also they lower your interest rate for a short period of time. Furthermore, they give you incentives for making your payments on time by reducing you principal over a 5 year period.
Both programs are under what is called the Making Home Affordable which is designed to help keep people in their homes by making monthly payments more affordable.
Hope this helps,
Jeffrey Ragan
A re-amortization is when the lender recalculates your loan after adding your missed payments onto the loan. This will decrease your monthly payments, but increase your amortization period. For example, a 30 year ARM the borrower has paid for two years, with 28 years remaining. Rather than letting the borrower foreclose, the lender might re-amortize the loan as a 40 year fixed rate loan, adding unpaid payments to the principle as this happens.
Hope this helps!
Hope this helps!