Posted on: 06th Sep, 2008 09:32 am
We have been paying Option 1 on our Option-ARM for 2 years now. The principle has increased by 25,000. We are looking at what our options are before we run out of them - realizing we can't let the principle get any higher as the value is at or close to below the principle (value has gone down over $200K in 2 yrs).
Looking at our statement we've decided we should start paying at least the interest-only payment. My question is this - in about 14 months the "minimum payment" option is no longer available to us. Will the interest only be recalculated at that time to begin paying the deferred interest?
Thanks to all that respond.
Ed
Looking at our statement we've decided we should start paying at least the interest-only payment. My question is this - in about 14 months the "minimum payment" option is no longer available to us. Will the interest only be recalculated at that time to begin paying the deferred interest?
Thanks to all that respond.
Ed
HOLY CRAP!!!
It should be illegal for such loans to exist!
It's really hard to tell Ed without seeing the actual terms of your mortgage but I would have to assume that the interest only payments would then be calculated on the current loan balance at that time which would include the extra $25K. Someone may be along with better info but my advice to you would be to either refi your mortgage(if possible) or try and sell your home and buy one with a normal mortgage where your principal balance goes down, not up.
If you don't start paying more than your interest on your home and the value continues to drop you may end up in a world of trouble in the near future.
I appologize for being so blunt Ed but it kind of sounds like you've bitten off more than you can chew unless there's a big piece of the puzzle here that your not telling us.
I do wish you the best of luck!
It should be illegal for such loans to exist!
It's really hard to tell Ed without seeing the actual terms of your mortgage but I would have to assume that the interest only payments would then be calculated on the current loan balance at that time which would include the extra $25K. Someone may be along with better info but my advice to you would be to either refi your mortgage(if possible) or try and sell your home and buy one with a normal mortgage where your principal balance goes down, not up.
If you don't start paying more than your interest on your home and the value continues to drop you may end up in a world of trouble in the near future.
I appologize for being so blunt Ed but it kind of sounds like you've bitten off more than you can chew unless there's a big piece of the puzzle here that your not telling us.
I do wish you the best of luck!
Yeah well who'd have thought values would drop that much huh? We're prepared to sell and cut our losses. I'll be talking to Countrywide Monday with this same question. Thanks for the input.
