I've just been shown a mailing to a homeowner. The homeowner's monthly mortgage payment at present is about $1,100, not including insurance and real estate taxes.
The mailing offers a refinance with a fixed interest loan, no negative amortization, with a new payment of $388. An alternative offer is included: $36,000 cash out, with the new monthly payment of only $453. The interest rate on the existing loan is already reasonable, though could be lowered a bit with a reputable re-finance. The exisitn loan includes amortization while the new loan is "interest only payment" loan. The unsolicited mailing, on a piece of paper 8 and a half by four inches, so there isn't a lot of fine print. But it does reveal that the new loan amount is about DOUBLE the existing balance, and is a fixed rate is fixed for only five years, after which it becomes an adjustable, based on LIBOR plus 2.25. The offer says the interest rate is 2.125%, with an APR if 3.581. Is this the basis of the housing recovery? Gene _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
