HOW TO GET OUT OF A BALLOON PAYMENT

Question

Hey guys, my aunt had a paid off house until her son took out a large sum of money against it they refinanced, then 2008 happened and my aunt did a home remod. long story short that paid off house now owes 350k with a ballon payment that comes in about 20 years which my aunt wont have the money to pay for and will end up losing the house which she LOVES. Her father recently died and left her a paid off house which i currently live in she does not want to sell either house is there any way we can renegotiate terms, leverage the paid off house, or maybe I can some how purchase at a cheaper rate hold the deed and let her continue to live in house.

Any experts out there with the some input its greatly appreciated I want to save my aunts home and hopefully help her save money or even make money.

THANKS!

Any experts out there with the some input its greatly appreciated I want to save my aunts home and hopefully help her save money or even make money.

THANKS!

Monique Carrillo · Answer

The problem is the interest rate is adjustable and just keeps going up and the amount she pays every month continues to go higher but i see to fix this she needs to refinance?

Bob E. · Answer

A few thoughts

-  When was the loan with the ballon written?  Does Dodd Frank Apply?

-  Who wrote that loan?  Why did her sone take money out against it?  Is he on the title?  Is he on the loan?  What did he do with the money and why is he not paying it back?

-  What is the house worth now?  i.e. how leveraged is it?

- you should be paying rent on the house you are living in and that money should go to pay off her loan.  If you add that to what she is paying and what her son should be paying she should be able to gt out of this without losing her home.

Chris Purcell · Answer

Please tell me you have talked to your lender before making this post

You think your bank honestly wants to take the house back while the note is performing

David Faulkner · Answer

How old is your aunt? Is this her primary residence? I agree that a traditional fixed rate refinance is likely her best bet, but in some rare cases if this will not work and she still wants to stay in and keep the home, she could look into doing a reverse mortgage. I'm not a huge fan, as it is really expensive, but in some cases it could be considered as a last resort for holding onto the property.

Chris Mason · Answer

Sure, feel free.

Monique Carrillo · Answer

@Chris Mason Thanks Chris great information I shall do so more reading.  If I have any questions can I reach out to you?

Chris Mason · Answer

Hi @Monique Carrillo,

Like others have said, yup, basically just refinance it.

If she can't afford fully amortized payments today, the good news is she has 20 years to sort it out and put herself in a position where she can.

In theory you could rate/term refinance it into your name to help her out.

Sam Shueh · Answer

Talk to a CPA.....

Monique Carrillo · Answer

Hmm maybe it was read wrong I shall re read new to ALL of this so I am trying to learn and I really want to help my aunt she is on a fixed income.

I appreciate all the input

HOW TO GET OUT OF A BALLOON PAYMENT

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