I’m 70, retired with some health issues. Have quite a lot of debt besides my condo on which I owe $29900, and its only worth about $49000 at the moment. When I purchased it in 2000 it was $118000. In 2003 I refinanced to bring the interest rate down to 5.75 and switched to a 15 yr. fixed mortgage. Have considerable other debt, $9350 vehicle ($67 monthly interest), and $18500 credit cd.debt ($102.78 monthly interest), also monthly condo dues $206 and utilities. Have only my social security and a small pension to rely on so I’m hoping to find a way to make my finances a little more stable. So far, I am not behind on anything, but its becoming more and more difficult since I am not working. When I asked about loan modification at my bank (Chase) I was told that all they could do was maybe give me 1% lower interest, but it would extend my mortgage for another 10 years and only lower my payment be about $57 a month. Oh, and also it would cos t me at least another $1500 to refinance.
Is there any kind of loan modification program that might help in my situation and if so what would it cost?
To start off by answering your question… speaking to Chase directly is your best approach for getting your loan modified and it shouldn’t cost you anything, if you qualify Chase doesn’t have any fees for this. There are never any guarantees that you will qualify for a modification though, and even if you do, that it will have a drastic impact on your monthly payment. Refinance would have more of a guaranteed outcome, but like you said, it also comes with a price tag. With some equity in the condo you could also consider selling it, and using the cash to secure more affordable housing someplace else.
You could also leave the mortgage alone and look to free up some cash on the unsecured debts (cc’s). I calculate with $18,500 in debt you’re paying about $500-$600 in minimum payments alone. If you could find a way to reduce or eliminate that altogether, that would go a long way in helping to make the mortgage payment more affordable for you. With your only sources of income being SSI and a pension, there won’t be very much the unsecured creditors could do to you if you went into default. I would suggest you speak with a local bankruptcy attorney to see what can be done.
Please keep us posted or feel free to ask further questions in the comment section below. I am subscribed to this post and will do my best to respond promptly. Good Luck!
Andy is a licensed real estate broker in Massachusetts and is the founder of Northeast Properties in Norton, Massachusetts. His brokerage is designed to help homeowners in today’s difficult real estate market, specializing in short sales. Andy speaks with Massachusetts homeowners every day, helping them to address their questions or issues with short sale or loan modification. He enjoys helping consumers arrive at the correct solution to their problem, and believes that the only way to correctly do that is by presenting them with all of their options in an un-biased manner.