MORTGAGE PRO-TIP: If youre taking out a loan for $1,030,000 (over a million dollars) and your payment is listed as only $2,700, you should look at your loan terms REAL closely. If it sounds too good to be true, it usually is. In this case, the person whose documents Im looking at got a Pay Option Note, where the loan has an actual interest rate of 9.950% but an Initial Minimum Payment calculated at 1.250% interest. So the loan officer tricks you into taking a loan way above your budget by pointing out that nice $2,700 *initial* payment, but its only paying a fraction of the interest, and the rest of the interest is being added onto the loan amount so youre going backwards on the loan. And then after a year or so, that minimum payment option goes away, and suddenly your payment jumps up to what it SHOULD BE, which is about $9,000. ...And obviously they couldnt afford such a jump so they went into foreclosure. Always read your loan documents very carefully, dont JUST look at the payment amount.
Posted on: Fri, 23 Jan 2015 05:20:05 +0000
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