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Posted by Don on October 26, 2004 at 05:59:07:
In Reply to: Refi question posted by Ang on September 24, 2004 at 08:54:21:
: I was wondering if there are any companies that refi people without any equity in their home. Our mortgage is $430...probably worth about $460. Right now we are stuck in an awful mortgage (a deal with the DEVIL-AMERIQUEST). Payment is $3200/month. All of it goes to interest only, so we are never going to get equity. Is this a hopeless situation? If you are making the payments alright at $320 I presume not the $3200 you have typed in the mortgage is just strung out
over a longer time. You seem like you can make the payments ok. What was the amount of the mortgage? If
it was not too much you may be in better shape than you
think. It is coustomary that no matter how big a payment you pay the first years go in interest. For instance a $100,000 mortgage at 9% int. for 20 years would have a $899.73 payment. After 10 years the owner will have paid in $28,974.80 on the principal, $78,992.80 in interest and would still have a balance of $71,025.20 and he would have actually paid in
$107,967.60. How long is the loan for? If it amorts in 30 years don't worry about it it will pay off in 30 years at the rate figured. If it is on a 20 year mortgage it will pay off in 20 years unless you have signed a mortgage with a balloon. A balloon is a small payment for so many years and then one lump sum at the end of the certain period. Check your contract and see what it actually says. If it is a balloon you are right. You are paying almost all interest only it would appear. That would be sort of bad unless you saved money up on the side to pay off the balloon. That $460
per month would be more realistic. There is no reason you can't save the $140.00 per month difference if there is a balloon and pay it off at one lump sum. Again look at that contract. Or go to the courthouse and let them draw up the actual deed and show you what it says and the figures on the deed. You may be worried over nothing.
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