BALLOON ARM & MODIFICATION OR REFINANCING MORTGAGE

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Icon Mini Profile kinamoni





Joined: 30 Nov 2009

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Post Posted: Mon Nov 30, 2009 3:08 pm    Post subject: BALLOON ARM & MODIFICATION OR REFINANCING MORTGAGE
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I realize that my loan is a balloon arm and I've already modified my loan a year ago. My husband is getting laid off as of 12/31/09 and I am 3 months behind on my mortgage. I don't know what I'm asking. I can make 4 mortgage payments by end of Dec. 2009 but is it worth it? I mean, it's our first home and I don't want to leave it but a balloon arm- this is really hurting us. Is it worth it? I guess I don't understand what a balloon mortgage is?
Icon Mini Profile jenkin7





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Post Posted: Mon Nov 30, 2009 11:10 pm    Post subject:
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Hi kinamoni,

A balloon mortgage is a short term mortgage that has a fixed interest rate for a certain period of time, usually 5 or 7 years. Once this period is over, the borrower has to come up with a large sum of money and pay off the remainder of the balance on the mortgage.

However, the borrower can refinance the balloon mortgage into a fixed rate mortgage to pay off the existing loan. When do you have to come up with the lump sum balloon payment? In case, you do not have to pay it off immediately, you should try and make payments under the modified plan. Once you have sufficient income and a good credit score, you can refinance the loan into a fixed rate mortgage.
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Post Posted: Tue Dec 01, 2009 1:05 pm    Post subject:
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Great! Thanks for your reply, perhaps this is the route I should go! I love my house and I don't want to lose it. Thanks again!
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Post Posted: Tue Dec 01, 2009 1:09 pm    Post subject:
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Sorry! My balloon payment is due 2013! My credit sucks right now and it'll only get harder once my husband is laid off. I guess I won't be able to refinance until my credit gets better!
Icon Mini Profile jenkin7





Joined: 04 Jun 2007

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Post Posted: Wed Dec 02, 2009 2:49 am    Post subject:
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Hi Guest,

Your balloon payment is due in 2013. You have more than 3 years to build your credit. If you have small debts and if you make your monthly payments on time, improving your credit scores will not be a big deal. However, the recent job loss is a matter of concern for you. But if you want to keep you house, you need to make payments as per the modified plan for the time being. You can also talk to the lender and explain your financial difficulty due to the recent unemployment. If the lender agrees to lower your mortgage payments further, that will help you a lot in this situation.
sherri

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Post Posted: Mon May 31, 2010 5:03 pm    Post subject: home loan modification or is it?
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I have been 7 months behind on my option arm loan. I have just received my modification papers in the mail.So now i am looking at an affordable nortgage. Only dilemma is that it read that this is a balloon mortgage. Is this supposed to help me or make it worse at the end. I am broke and have no credit. Now what?
Icon Mini Profile jerry
jerry
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Post Posted: Tue Jun 01, 2010 2:30 am    Post subject:
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Hi Sherry,

Your query has been replied to in the given page:
http://www.mortgagefit.com/problems/modification-balloonloan.html

Just take a look at it. Hope it helps you.

Thanks,

Jerry
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