I received a letter from my lender that my mortgage payments were increasing because my five (5) year penalty

Asked by Angelica Cendejas, California Tue Aug 12, 2008

is due by the end of August, What can I Do?

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Mortgage Guy, , Bellevue, WA
Tue Aug 12, 2008
Another option would be to refinance out of your current mortgage if your new payment will be significantly higher than the payment on a new mortgage. Of course, this would depend on what your new interest rate will be, how long you plan to live in your current house, if you can qualify for a new mortgage, and if refinancing will be advantageous for you according to your payment and equity objectives.

I would recommend that you speak with a trusted and knowledgable Mortgage Consultant that can guide you through your options.
1 vote
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Tue Aug 12, 2008

The first question is, can you afford the new payment. I know it is a shock to have to pay more, however, if you can afford it, then you will have to pay it.

If you cannot afford the adjusted payment for any reason, then it should be heartening to you that more and more, lenders are willing to modify loans to prevent this interest rate reset from causing you to lose your home. If you would like to give me more particulars off line, I might be able to give you more direct guidance on how to proceed. Do not wait too long to open the dialog with your lender and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
1 vote
Keith Sorem, Agent, Glendale, CA
Wed Aug 20, 2008
I am a little confused at your question.
Are you saying that you have a balloon payment coming up, and if you don't make the balloon payment, your monthly payment is increasing?

Either way, you are facing the same problems many other home buyers who purchased in the last three years are facing. You have a couple of options:
1. Contact the lender and see if they will modify your loan. You are going to have to explain how it is that you qualified for the loan in the first place, and now you will be unable to afford the payment. Sometimes this is called a hardship letter. Be prepared to back up what you state in the letter. The stronger case you make, the better your chances.

2. You might end up having to sell. The most important thing is to find out your options. I suggest talking with a Realtor experienced in short sales and have them walk you through your options. None of this is pleasant, but better to know where you stand and what might happen now.

Lenders say that most owners in trouble never respond to their phone calls or letters. If you want to stay in your home, then make a strong case for why it would be in the lender's best interest to work with you. This is where your Realtor comes in.

Post if you need more help.
0 votes
Joel Javan, , Santa Clarita, CA
Tue Aug 12, 2008
Act on this right away. Contact your lender and see if a loan modification would help ease the burden of increased payment. If not, contact a loan professional and see what they can do as far as refinancing is concerned. Call or email me if you need me to refer a loan consultant to you.

Joel Javan
Prudential California Realty
661.607.1577 (c)
800.350.4321 Ext. 3888 (o)
JoelJavan@YourNotSoSecretAgent.com (e)
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Aug 12, 2008
GOOD QUESTION: You can refinance the loan I am assured you most likely 5 year ARM. It will prevent penalty. If you refinance your home required bank statements, employment, tax returns, other source of income for approx. past 2 years.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference:  http://www.lynn911.com
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