Posted on: 13th Jul, 2009 09:55 pm
My home mortgage is being modified from 30 years fixed rate 6.75% to: a 40 years mortgage made of first five years at 4.75% and remaining at 6.75%. Next two months I have been spared the payments.
This is my first house and I got a loan with the Acorn program with Bank of America. The original loan term and rate aren't too bad, but due to financial hardships I cannot afford my payments.
The total loan started two years ago for $450,000.
My monthly payments are $3,300 (principal, interest and home insurance)
With the modified loan, I will save two payments and the new monthly rate would be $2,400 for five years...but I am afraid that increasing the term to 40 years will dramatically slow down how much equity goes in my house and I would pay the bank a substantial amount in interest for the next 5 to 10 years.
I obviously need to take their offer to modify the loan, but am I being ripped off?
This is my first house and I got a loan with the Acorn program with Bank of America. The original loan term and rate aren't too bad, but due to financial hardships I cannot afford my payments.
The total loan started two years ago for $450,000.
My monthly payments are $3,300 (principal, interest and home insurance)
With the modified loan, I will save two payments and the new monthly rate would be $2,400 for five years...but I am afraid that increasing the term to 40 years will dramatically slow down how much equity goes in my house and I would pay the bank a substantial amount in interest for the next 5 to 10 years.
I obviously need to take their offer to modify the loan, but am I being ripped off?
Hi italcal
I don't think this is a bad deal. In a loan modification, if your interest rate is reduced to certain extent, the lenders will increase the term of the loan. This will help them in getting back their due payments. I think, this is a good deal to consider. Moreover, it would not only help you in saving your house, but it would also save your credit.
Thanks.
I don't think this is a bad deal. In a loan modification, if your interest rate is reduced to certain extent, the lenders will increase the term of the loan. This will help them in getting back their due payments. I think, this is a good deal to consider. Moreover, it would not only help you in saving your house, but it would also save your credit.
Thanks.
this could turn out be a good deal but remember that you should make sure that you are looking this as an investment.
I know in long run you will ultimately pay a large sum but by that time you will be also somewhat financially settled down and can easily afford the premiums every month.
I know in long run you will ultimately pay a large sum but by that time you will be also somewhat financially settled down and can easily afford the premiums every month.
ripped off? you're asking for help...they're giving you help...now you feel ripped off because you can't make the contractual payments and they're making it too easy for you?
what is going on in this country? maybe they should just forgive the mortgage and give you a release so you can neglect paying anything further.
what is going on in this country? maybe they should just forgive the mortgage and give you a release so you can neglect paying anything further.
italcal
Ask your sefl how long you are goign to stay in this house. If you plannign to stay in this house for next 5 years only and sell it off then you are really gettign a good deal
If you are planning to stay inthe house for more than 5 years or may be next 28 years. You still end up saving money
probably you will end up paying more if you keep the house for the entire 40 years
Good luck and feel free to ask
Ask your sefl how long you are goign to stay in this house. If you plannign to stay in this house for next 5 years only and sell it off then you are really gettign a good deal
If you are planning to stay inthe house for more than 5 years or may be next 28 years. You still end up saving money
probably you will end up paying more if you keep the house for the entire 40 years
Good luck and feel free to ask