Real Estate Matters
www.reporterherald.com • Saturday, October 1, 2011 • Reporter-Herald
Homeowner may default on loan ILYCE GLINK TRIBUNE MEDIA SERVICES
Q
uestion: I am pushing 73 and my house is underwater. I have a first loan of about $140,000 and a second loan of about $18,000 with a 7.85 percent interest rate. My second loan has a balloon payment coming due soon. I was lied to about this loan having a balloon payment. Neither of my current lenders will work with me to refinance the loans, and I can’t find another lender to help either. I always pay on time, have never paid late and have great credit. I paid about $200,000 for the home, and it’s now worth about $135,000. I’m thinking of walking out and renting to cut down on monthly expenses. All of these thoughts bring a moral issue to me, and it goes against what I know is right. I just want a lower interest rate, and it amazes me that no one will help me. It seems illogical and unfair to me that the only way I can get help is to stop paying on my mortgage. What is the worst thing that will happen if I give it back to them since they will not work with me? I have been told by several lenders to stop paying my mortgage, bank the savings and walk out to help myself. Credit is not my major concern at this point in my life. Any other concerns I should be aware of if I just walk out? I’m not sure I can do it and live with myself, but I feel I have to protect myself from these people. Answer: I’ve answered this question in the past, but your question has an interesting twist to it. It appears you can afford your mortgage payments but did not know the promissory note on your second mortgage has a balloon payment. A balloon payment refers to a loan that comes due at some time after five or seven years, and at that time you must repay the entire amount that is still owed on the loan. With a customary home mortgage, you have that loan for 15 or 30 years and the payments you make over the length of the term result in a zero balance at the end of the loan term. Obviously, we don’t know the circumstances of how you obtained your loan or what type of a loan you were getting — or thought you were getting. However, in just about all the cases we’ve seen, the borrower is given loan documents to sign at the closing and has the opportunity to review those documents. While most borrowers don’t read all of the terms and conditions of the loan documents, all of them should. If you read your documents carefully, you’d see the interest rate for the loan, how it works, whether the rate can change, whether payments can increase and by how much, when the loan is due, whether you will have to make monthly payments to the lender for real estate taxes and insurance, and what the costs are to obtain the loan. ■ See GLINK/Page E3
Photos courtesy Oakwood Homes
The Turner floor plan in the New Beginnings II Collection at Thompson River Ranch.
Amazing Opportunity PAID ADVERTORIAL
O
akwood Homes is having another great year in Thompson River Ranch; once again being the top selling community across all of Northern Colorado. While the subdivision has a long way to go until it’s fully built out, Oakwood Homes is down to 30 home sites available for the affordable New Beginnings II Collection homes. This includes the Gilpin, Emery and Turner floor plans, which have been some of the most popular choices in the 73 sales so far this year. Starting with 209 of these home sites, Oakwood Homes is down to roughly 30 left of this size. Mike Welty, Community Manager at Thompson River Ranch, explains that the current prices won’t last long. “We’re able to sell that Collection for a great price on those home sites, but that will go away once those lots have been sold.” At the current rate of sales, they won’t be available too much longer. However, they still have plenty of home sites for the New Beginnings 1 and Carson Collections to last quite some time. With many homebuyers trying to be in a new home before the end of the year, their inventory homes are in high demand. “We’re constantly advertising a quick move-in Gilpin model for sale, but it’s never the same Gilpin,” explains Welty. “The home is just a great value so it always sells quickly,
Kitchen and dining area of the Turner floor plan. and we start building a new one for the next buyer that needs a quick move-in home.” That’s exactly what they have going on right now with another Gilpin home available for those homebuyers looking for a quick move. For $200,190, it features three bedrooms plus a bonus room and two-and-a-half baths and over 1,531 finished square feet. Additionally, it includes a full basement, air conditioning, and five-piece master bathroom while still allowing you to
make personal selections at Oakwood’s Design Center since the home will be finished in November. Oakwood Homes realizes not everyone has the option to wait for a personalized home to be built, so they try to have a couple homes on hand for anyone that needs a home fast. This time last month they had four quick move-in homes available in Thompson River Ranch; currently they only have the one Gilpin.
Buying a home that needs work? Call the experts in FHA 203(k) renovation financing. An FHA 203(k) mortgage allows you to finance both your home purchase and renovation with a single loan. Call now to learn more. Vivian DeVoe, VP Mortgage Banker, NMLS#269876, 970-227-4702 Loans and rates subject to credit approval. Owner-occupied residences only. FHA conditions and restrictions apply.
Mike Welty and Dwayne Montoya will be on hand this weekend for any questions or additional information; contact them at 970-669-9801. Models will be open to view from 10 a.m.6 p.m. To get there, take Thompson Parkway south from U.S. Highway 34, then head west along Ronald Reagan Blvd. to the frontage road. Follow that south and you can’t miss the entrance to the community. You can find more information about Thompson River Ranch at www.OakwoodHomesCO.com.
www.HomeStateBank.com
970-203-6100 Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm Think big
Bank small