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Profile picture for kissyface123

Can my friend get out of her interest only loan, and pay less than what she currently is paying?

My Friends got suckered into an interest only loan.  She can't pay much more than the minimum due.  Her mortgage balance has only gone down maybe $100 in the past 5 years.  She really needs a different mortgage that will pay down the principal.  Would HAMP be able to help her?
  • October 19 2010 - Ridgecrest
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Answers (4)

Has your friend talked with a lender?  Given the facts rates are much lower she may find her payment would remain the same if she qualifies for a refinance.  Of course, credit, income and value of the home are all factors.  If there is a hardship, I recommend your friend contact NACA (www.naca.org) to see if they can help her.  They are a non-profit that has agreements to modify loans for lenders....no, there is no fee.  Best of luck to your friend.
  • October 21 2010
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Profile picture for Bentley Advisors
I wouldn't say that someone w/ an int-only loan is a sucker.  Quite frankly, there is nothing that prevents them from paying more than the int-only min. pymt option.  If they chose to, they could be paying down as much principal as they wish each month assuming there is no prepay penalty.  It sounds more likely that your friend got in over her head from the start and bought too much house...or she's experienced financial hardship since.

It's possible that her pymt could go down depending on what her existing rate is and what rate she might obtain on the refi.
  • October 20 2010
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What's her loan balance?

What's the value of her home?

What's her credit score?

Does she have a steady job and good income?

Does she have a lot of outstanding credit?

And the list goes on....

A lender will need these questions answered and more.
  • October 19 2010
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Profile picture for wetdawgs
You don't give enough information to be able to evaluate. 

She can go to the making home affordable website on the web (google it) and see if she is qualified.

She can also see if she is qualified for a traditional refinance.
  • October 19 2010
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