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Interest Rate Review By Lender


sabwafare2001
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The last post in this topic was posted 4692 days ago. 

 

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Hello,

 

Back in July 2007 I financed a 100% interest only loan through ING Direct and National City. As of this time the payments are as follows:

ING Direct: 80% LTV @ 6% 5yr IO w/mature date 7/2012 - original amount $162700, current amount $162585 - Monthly $813 - I pay $820

 

National City: 20% LTV @ 5% Line of Credit 7yr IO mature date 01/2016 - original amount $40650, current amount $39049 - Monthly $160 - I pay $320

 

I would like keep my Nation City loan, unless a better option comes up, since I have been lowering my interest rate which as currently now 5% and because the house sold be sold or loan refi'd before mature date.

 

I now have the option of during a rate review(costs $750) with ING Direct to lower my rate to 5% which makes the interest only payments at $677/mon. This loan would not mature until 04/2014. I would still make a payment of $820 which means it would take about 5.5 months to pay back the $750 to myself. ING stopped doing the IO plan after I submitted for this.

I called about 3 weeks later when rates dropped, but after they stopped doing IO and they offered me a principle and interest with the same terms for $870/mon. I have not received the rate review letter displaying the interest yet, but it will after the first letter expires on 4/1/09.

For both rate reviews, there will be a 3% prepay penalty if loan is paid off with the first year.

 

So the question is, which would be a better deal to go with the IO or the PI payment? Should I keep what I have or is there a better solution with another lender.

 

I now rent this house out in Tucson and hope to sell it to break even or have a little equity once the market picks back up. Since I now live in near Dallas I wouldn't want to keep the house any longer than I would have too. Rental property is ok, but it's could be more difficult since I don't live in the state. If I choose to do one of the rate reviews, hopefully the house wouldn't be sold not until a year or more to avoid the penalty.

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On a non owner you'd not come anywhere close to that anywhere else I would take it or set pat on what you have

It doesnt matter which you take if you know how much you can pay - it is all about interest rate my question is if it takes 5-6 months to make up the difference and then you have the risk of a PPP if you sell within a year (which it sounds like could happen) is it worth doing this?

 

B

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To avoid the PPP I would try to simply keep the house rented until a year after the rate renew. Which means a would try to sell toward the end of 2010. According to zillow, which I know may not be a good reliable source, I am upside down about 10 to 15K as of this time. That is the main reason I may not sell it soon.

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