Caraballo & Associates

I feel like I have writing this series for a year. Actually it has been close to half a year. My first post on this subject was in November of ’09. I actually started looking into it a few months before and sat on the decision for a while before I decided to take the plunge. ANYWAY……

I am happy to inform that I DID IT!!!!!

I finally got approved for and accepted my loan modification.

Well let’s get into the details.

I need to tell you that i originally had a 30 year fixed rate mortgage at 6.75% Principal and interest. (basically your average vanilla mortgage).

The following is a list of the changes good and then not so good.

The good news:

• The mortgage stayed as a fixed (sort of, see below). It also remained with principal and interest payments.
• My mortgage went from a 30 year fixed to a 33 year fixed (I don’t really understand where they got this number from and I have not had a chance to ask).
• My interest rate for the next 5 years is going to be 2% (How is this NOT good, right?)
• Year 6 it increases to 3% (still good)
• Year 7 it increases to 4%
• Years 8 -33 are at 5%

This is a monthly payment decrease (discount) that ranges from 43% to about 23% over the years. Not bad for some paperwork, stress and time…Well it depends on who you ask but I am happy with it.

More good news: There is a borrower incentive attached to the new mortgage that says that if I my loan does not go 90 days ate in the first fives years, they will credit $83.33 for every month we pay on time towards the principal balance of the mortgage. That’s close to $5,000.00 paid towards my principal at the end of the first five years if I make all my payments on time.

I better get my stuff in gear!!

The not so good news:

• My principal balance went up $5,000.00 (I am sure that this is them making up the money from me not making full payments during the trial period) That’s ok because I have a chance to make it up if I make my payments on time for the next five years. (which I should do anyway, right?)

I waited a little while after they mentioned that I was approved to make sure it was real. There is a tendency for things to change last minute when it comes to mortgages and real estate so I did not want to get to happy to soon. I even called the bank and asked the rep if I was finished, done, kaput. I asked her if there was anything that could possibly pop up that may change anything. I was told that it was final and that there was nothing possible that could go wrong at this point.

I still waited and received my first statement in the mail the other day with the new numbers FABULOUS!!!

I would like you to keep in mind that the whole time I just wanted my monthly payments to drop and that is exactly what I got. There are some people out there that want the bank to drop their interest rate, change the terms of the loan, reduce the principal balance and forgive any late fees that have accrued. I was not that picky. I am able to have some more breathing room now on a monthly basis to do with the money what I please.

I could make extra principal payments, pay down credit card debts, work on my insurance coverages, invest it. The world is my oyster!
Maybe not that drastic but I do have some extra money on a monthly basis and if I am smart about it, I can improve my financial picture in the short AND long term. I can start building another house, my financial house of cards.

I hope you enjoyed reading this series as much as I enjoyed writing it. It took a while but I think there is some valuable information here. On a side note, I can honestly say that this is not for everyone. Just by reading this series, you already know that you need a lot of patience and the banks don’t really make it that easy. Not super difficult but definitely not easy. If you are strained of time, patience or education on things financial, I would say that you should really think hard between doing this yourself or hiring a trusted professional. The chice is yours and the series is here to help you decide.

Best of luck!!!

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