This new approval is from Central Mortgage Company. The borrower had a pay option arm which is the worse possible loan you could have since the balance keeps going up every month. To make matters worse the interest rate was adjustable at 6.875%. Also there comes a time in this type of loan that you will not be allowed to pay just the minimum payment and you will have to pay the full Amortized Payment (Principal, Interest, Taxes & Insurance) in order to stay current on your mortgage. Here is the Loan Modification terms from Central Mortgage Company below:
NEW LOAN MODIFICATION TERMS
$229,403.70 LOAN BALANCE
4.0% Interest Rate for first 2 Years $764.68 Interest Only
2% Interest Rate on the 3rd Year $1009.07 Principal and Interest
3% Interest Rate on the 4th Year $1119.19 Principal and Interest
4% Interest Rate on the 5th Year $1231.41 Principal and Interest
4.75% is the Interest for the remaining loan term (20 years) $1316.10 Principal and Interest
ACTUAL APPROVAL
OLD MORTGAGE TERMS
$229,403.00 LOAN BALANCE
6.875% Interest Rate
Pay Option Loan -No Principal or Interest were being paid towards the loan so the borrowers
balance kept going up every month.
$1020.69 Minimum payment which ($375.00) was Property Taxes and Insurance.
Fully Amortized at 6.875% would have been $1,882.02 with Property Taxes and Insurance
best case scenario if the Interest Rate would have been a Fixed Rate which it was not.
Benefits of New Loan Terms
The New Loan Terms are that the Borrower will now be able to see their Mortgage Balance reduced every month with each mortgage payment made. The Interest rate is fixed
and the loan is impounded also. The fully Amortized Rate of 4.75% after all adjustments are at
current market interest rates
Feel free to contact me with any questions you may have regarding loan modifications. Start today
Save your house and your money! Banks are doing loan modifications
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