My bank want to modify my loan for $750mo, 2% interest rate, but keep the balance same.

Profile picture for lyok23
I have 2b+2ba condo in Reseda, CA. My bank wants to modify my loan for $750mo, 2% interest rate, but keep the balance same, which is $280,000. They actually deferred the $80,000 and I have to pay 2% fixed interest for 360mo only on $200,000. But I have to pay that amount, $80,000, end of the loan, when I sell the property or when I refinance. I though when modification is done the bank also lowers yours balance with interest rate permanently. I guess not. I just like to know if that's good deal. I think it is, because if I rent 2b+2b condo, I have to pay at least $1500 in Tarzan-Reseda-Encino area.
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June 25 2011 - Reseda
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Profile picture for Ben001
That sounds so great it looks like banks are coming around finally.
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June 27 2011
Profile picture for Lrozales
That is a  really good deal and I applaud your lender for working with you.  Grab it now!  There is no reason for you to even have a second thought.  If you rent, you pay $1500/month and if you modify your loan it will only be $750/month for 360 months.  If you calculate the money you save for your loan modification vs rent, you are saving $750/month x 360 months = $270,000.  Even if you don't lower your balance, you are still ahead.  Don't forget that you still get the tax write off when you continue paying your mortgage vs renting.
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June 25 2011
Profile picture for wetdawgs
Sounds like you've got a real deal!   It is extremely rare for the principal to be lowered.  I think there have been only enough so that some people can be quoted in the news media.

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June 25 2011
 

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