Relative of mine is having difficulty paying her mortgage and has been offered rescheduled terms.
The amount owed is 300K. Interest is 4%. Term is 33 years. Monthly payment is 1,360.
The bank has offered in writing to reduce payments to 1K/ month for a year but then the payments will increase to 1,700/month for the next 32 years.
This will increase the amount repayable by 120K. I calculate that the new interest rate will be nearly 6%. The offer letter has no mention of the new rate.
To me this seems like a criminally unfair deal. My relative would get her mortgage reduced by a total of about 4K for 1 year in exchange for paying back an extra 120K over the next 32 years. How can this even be legal?
The amount owed is 300K. Interest is 4%. Term is 33 years. Monthly payment is 1,360.
The bank has offered in writing to reduce payments to 1K/ month for a year but then the payments will increase to 1,700/month for the next 32 years.
This will increase the amount repayable by 120K. I calculate that the new interest rate will be nearly 6%. The offer letter has no mention of the new rate.
To me this seems like a criminally unfair deal. My relative would get her mortgage reduced by a total of about 4K for 1 year in exchange for paying back an extra 120K over the next 32 years. How can this even be legal?