Intersest only portion of mort. term is ending - HELP!!!!

scissorchic · Joined: 27 Nov 2007 Posts: 1 1.93 Dollars($)

I have an 'interest only' mortgage (for the first three years) and in three months my lender is expecting me to begin paying the full mortgage payment, which I cannot afford to pay as the sagging economy has cut my income drastically. If the economy hadn't tanked I may have just been able to make the payments, but....
I can see no alternatives, other than losing my home!

Guest 0.10 Dollars($)

Why is the lender expecting you to pay the full payment amount every month? The contract probably states that the first 3 year is interest-only period, so he shouldn't change it now. If he is not negotiating with you, is there any way, you can refinance to a full fledged mortgage loan?

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi scissorchic,

Welcome to this forum.

If you have an Interest only mortgage, then you should pay according to the contract. If your lender expecting you to begin paying the full mortgage payment, then it is wrong. Talk with you lender and try to negotiate it with him. Otherwise, you can think about refinance and pay your lender off.

Thanks,
Larry

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Hello Scissorchic,

If your three years of interest only period is ending after three months, I think you should talk to your lender about refinancing the mortgage. If you try to refinance it in to a fixed rate mortgage then your monthly payments will come down.

You may also shop for other lenders who refinance interest only mortgages. However, you will have to consider things like how much equity you have in your home, before doing a refinance.

evolovik26 · Posted: Wed Nov 28, 2007 9:14 am Post subject:

See if you can refi into another interest only or an affordable mortgage. Depending on what rate your on now it might be possible.

jasonredding · Posted: Wed Nov 28, 2007 2:01 pm Post subject:

Hello Scissorchic,

To just clarify, yousigned up for an intrest 30 year mortgage 2 yrs and 9 months ago. That mortgage had a 3 yr intrest only introductory period and now in 3 months it fully amortizes and your payment increases significantly.

You have to choices here,

1. call your current lender and see if they will do a loan modification. Ask for either a rate or term modification due to the hardship you are going to have. Problem with this is though they may want you to be behind already before they will do that. It depends on the lender. You do not want to fall behind and ruin your credit

2. Look into refinance options with a respectable mortgage professional. Their may be a better loan program out there for you, you may also have an oportunity to get yourself in a better finiacial position with a refinance also.
Now if your bank gives you a hard time and wants you to be already in hardship and the refinance doesn't do you the wonders neccessary to justify the fees asscociated, your bank may be more responsive to a loan modification once they have recieved a pay off request and you have a good faith estimate from another lender. Not all lenders care about retention but some do.

I hope this helps and I was accurate about your situation

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