Balloon payments

[JulieM]

We were approved for a modification. Current unpaid principal is $278000. With the modification, the new principal balance is $287000. We are told that this modification includes a balloon payment of $201000. Obviously, we are desperate. Is this our only option- to remain in our home?

 

[Jzone]

A modification should lower your balance, not raise it. Look for a different bank

 

[just_me]

We were approved for a modification. Current unpaid principal is $278000. With the modification, the new principal balance is $287000. We are told that this modification includes a balloon payment of $201000. Obviously, we are desperate. Is this our only option- to remain in our home?

I certainly hope your payment is reduced substantially in that scenario given you are only paying on 86,000. Is your payment now 860/month? Will they tack on 500/mo in escrow with that? Is it a fixed rate? Is it a reduced rate? Is this affordable and can you refi in the future at full amount or do you intend to sell and can walk away with 10k equity in this deal? Those are things to consider 'cause a balloon loan isn't really a good deal but you might consider it if you feel it's the only way to stop a foreclosure and you don't want to move. Foreclosures can be defended but only in Judicial States.

 

[AlexMoore]

A modification should lower your balance, not raise it. Look for a different bank

Yes, most likely it is.