Question by Sunshine23: Mortgage Repayment Plan?
Can anyone explain how it works? I have a mortgage I cant refinance because I have no equity and I also have a Prepayment penalty and they bank sent me an application for a repayment plan
I am not late in my payments and what I wanted was a way to lower my payments because I cant refinance nor have any equity
Best answer:
Answer by Phoenix
You will be losing a lot of money if you refinance your home with no equity to it however if you refinance with no cash out but just to lower the interest rate then, there’s a good possibility that you might get a good interest rate.
Read the Note copy you signed regarding the pre-payment
penalty.
Is it my understanding that you’re currently on default? Ask questions to your lending institution regarding the repayment plan and weigh the matter carefully.
Know better? Leave your own answer in the comments!
I had one done
a repayment plan is when the mortgage company divide the amount of money that you are behind on your mortgage payments and split it in a certain time frame for you to continue making your regular payments + a portion of the amount that you owe them…
ex: if you are late 2 months they will divide that debt in 6 months and add that amount to your next 6 regular mortgage payments.
It is a good option only if your are not too far behind… because your monthly payments will not be too high for a long time.. but if you are more than 3 months behind .. then it gets a little unreal to achieve.
Ask them for a modification plan… BUT DO NOT LET THEM RACE YOUR interest rate…
in a modification they will take the amount that you owe and put it to the end of your loan maturity date.. and you will be able to keep making your regular mortgage payments without any extra money added to your regular payment.
Good Luck on your negotiations.. remember to keep calling them everyday… and everything in life is business.. NEGOTIATE, real estate market is horrible and banks do not want your house they want your money and is a good time to let them know that you want to be responsible.. but that you need some help to get back to order.