Posted on: 24th Nov, 2009 10:06 am
I recently received my loan modification agreement from Citimortgage. I'd had 22 years reamaining on my original 30 fixed mortgage (have paid for 8 years). Now with the new loan modification Citimortgage is extending my loan to 40 years! Meaning I will end up paying for 48 years on a mortgage that was originally only 30 years. Can they really do this?
I think you are missing the point. They are changing your loan to a 40 year amortization instead of a 30 year. This simply means that your payments will decrease. If you want, you can still send extra money or pay the same amount you WERE paying.
Regardless, just be happy that they were willing to work with you.
Regardless, just be happy that they were willing to work with you.
I understand that my payments will be temporarily lower with the loan modification...But, I'm having a difficult time understanding how making me pay an additional 40 years in addition to the 8 I've already paid is helping me out. In the long run, Citimortgage will end up profiting more in interest with the loan modification than my original loan, I'm having a hardtime feeling grateful about that :?
I should note that I'd put a 20% down payment and obtained a 5.875% 30 fixed rate mortgage...and had always been on time during the first 8 years I had the mortgage.
I should note that I'd put a 20% down payment and obtained a 5.875% 30 fixed rate mortgage...and had always been on time during the first 8 years I had the mortgage.
Hi andrea,
I agree with what Eric has said. The lender is lowering your interest rate and extending your loan term just to make the loan affordable for you to pay off. The lender will want to recover his dues in full. Thus, he will extend the loan term if he reduces the interest rate for your loan. To know more about loan modification, check out the given page:
http://www.mortgagefit.com/know-how/loan-modification.html
Thanks
I agree with what Eric has said. The lender is lowering your interest rate and extending your loan term just to make the loan affordable for you to pay off. The lender will want to recover his dues in full. Thus, he will extend the loan term if he reduces the interest rate for your loan. To know more about loan modification, check out the given page:
http://www.mortgagefit.com/know-how/loan-modification.html
Thanks