Amortized Mortgage? - Posted by Confused1

Posted by Jeff M on February 05, 2002 at 14:01:21:

Dear Confused:
I ran the terms through the Quicken Calculator, and it gives a principle + interest payment (assuming monthly payments), it shows that you would have to pay $886.55 per month (The final payment would be a little less, $886.05). I don’t understand what the other $13.42 is paying for each month. Who pays the taxes and who pays the insurance? Is there any title insurance on this property? I am also confused… if you call the bank, and they tell you there are actually only 5 more payments instead of the 12 they sent to you, how does that hurt you? What, exactly, are you afraid of. If there is a balloon payment due, it is better to know now, so that you can make arrangements to re-finance the property for the balloon amount. If there is no balloon due, wouldn’t you rather know, so you don’t have to worry about it? As I understand it, most balloon payments are not a problem, you simply talk to the bank to refinance, or find another lender. The reason the banks do these type of balloon loans is so that they are not locked into a long term below market interest rate. The balloon allows them to adjust the rate to the current rates. My guess is that if you got this loan 15 years ago, the rates now are MUCH lower (ie. better for you). I hope this all works out for you.

Amortized Mortgage? - Posted by Confused1

Posted by Confused1 on February 04, 2002 at 23:17:56:

Hi, our home was (I thought) due to be paid off 5/02. I received my form 1098 and my payment book which has coupons for another year worth of payments. We assumed the note which says all due and payable May 2002, the payments remained the same and were amortized out, We have never missed a payment for the life of the mortgage but according to the 1098 it looks like the balance for our may payment will be about $7,000.00. Why would this not work out like this? Will we be getting notice that a balloon payment is due in May since the note says all due and payable by that date? We were given a warranty deed by the sellers but it doesn’t say anything about a balloon payment, just that we assume the note and agree to pay it. Anyone please shed some light on what we can expect to happen in May we will not be able to meet that kind of payment. Many Thanks, Confused1

Re: Amortized Mortgage? - Posted by Jeff M

Posted by Jeff M on February 05, 2002 at 10:36:51:

Who gave you the amortization schedule? You can get one using Quicken or MS Money, which I have if you don’t. All you have to do is put in the original date and terms of the mortgage (interest rate, length of loan), and it will calculate the principle and interest for each payment, and give you the balance after each payment.
The first thing that comes to my mind is that you possibly missed an increase in your required escrow (money you send to the mortgage company which they hold and then send to the tax authority, homeowners insurance company, etc). If your taxes have gone up since you owned the property, and you didn’t increase your escrow payments (the mortgage company should have sent you a letter requesting higher payments), then, essentially, I think the mortgage company will use part of the money you send them to pay these bills, and the length of your loan will increase. Call them and ask, or let me know, and I will send you the amortization schedule for your loan. If, in fact, they have been using part of your payments for the escrow account, make sure they have not negatively commented on your credit with the credit bureaus, since you were, in effect, behind on your payments.
I’m no expert, but I know someone this has happened to. Good luck.

Re: Amortized Mortgage? - Posted by Confused1

Posted by Confused1 on February 05, 2002 at 12:36:46:

Hi Jeff, I have a schedule it works out to my monthly payment which is $886.58 plus $2.50 for the Title co. mo. collection fee. I pay a little more every mo $902.50 which encludes the col fee. No other fees taxes etc. are collected. The note is held privately and my pymts are made thru the Title co. The note was for 15 years on $82,500.00 @ 10%, I would think it wouldn’t work out exactly, but I am quite surprised that the balance would be so much higher. The title co. sent me another years’ worth of pymt coupons, but the note clearly says “All Due and Payable” May 2002 so can I am confused as to what is going to happen in May. Will not be able to come up with that kind of balloon paymt. I am afraid to call because they may realize they should have only sent me 5 pymt coupons then what will I do? Thank you so much for responding and any advice you can give. Confused1