Should I accept this loan modification offer my attorney negotiated for me for my current mortgage?

Deal Score0

2 months deferred mortgage payments
4.0% rate, fully amortized, fixed, for 5 years
5.0% rate after the first 5 years, for the remainder of the loan
40 year term
no prepayment penalty

my current loan is FHA 6.5% 30 year fixed

3 Comments
  1. Reply
    bud68
    January 24, 2011 at 5:57 am

    Only you know your financial and personal situation.

  2. Reply
    v b
    January 24, 2011 at 6:31 am

    Only you can decide if the 2 months postponed and the lower monthly payments work for you. If you would still be foreclosed in 6 months due to an inability to pay….

    However, most of the complaints on loan modifications has been that the lender *hasn’t* been lowering the payments.

  3. Reply
    ibu guru
    January 24, 2011 at 6:49 am

    That’s an extraordinarily good offer. However, by extending the term to 40 years, you’ll be repaying this mortgage forever and a day. Total interest, therefore total costs, of the mortgage will be higher. And over half of those who renegotiate their mortgages have gone into default and foreclosure within 10 months. It seems most of them just cannot repay their debts. On the flip side, within 12-18 months, that interest rate should look like a blessing from the money-gods. Interest rates are bound to skyrocket since so much money has been printed out of thin air — monetary inflation inevitably leads to financial inflation.

    So, the only question now is, can you make the loan payments? Only you know the answer to that.

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