| Bank of America modification success
Well, I think I am now able to report success in getting my loan modified with Bank of America. I have been offered a fully-amortized 30 year loan with an interest rate of 3.25% for the first 5 years, after which it will go back up to 6.25% for the remainder of the loan. If I were to stay in my home for the next 30 years, it translates into a net effective rate of about 5.43%. I'm still waiting for the official documents, but I have been repeatedly assured that the modification has been approved and I should send in my new payment amount by January 1.
I'm completely happy with this modification. Funny thing, though, is that when I take into account the lower interest payments through the first 5 years and adjust my income tax withholding accordingly, I don't actually save that much money each month. Sure, my monthly mortgage payments are about $550 less, but I have to pay almost the same amount more in taxes. The big advantage to me is that I'll actually be paying down the principal, unlike my current interest-only loan.
My personal experience brings to mind two literary references: William Shakespeare's "Comedy of Errors" (for the title alone, not the actual plot) and a line from Henry Wadsworth Longfellow: "Though the mills of God grind slowly, yet they grind exceeding small." I'd make a small correction to that line: the mills of mod grind slowly... |