"This Blogs for You"

Have an Interest Only Loan?
Plan Ahead - Look at Your Loan Documents

When will your loan recast?                What will it recast too?

Because interest rates have remained low, many of the IO loans due to recast will have payment increases only to the extent necessary to begin amortizing and some may actually have the payment shock mitigated by a lower interest rate.  However, many Subprime loans have an interest rate floor that does not allow the rate to drop below the initial one and, in subsequent years, all borrowers will probably suffer additional payment shock as their loans go through periodic rate adjustments. Just considering the amortization component or the recast, current average payment shocks are estimated at 15%, and each 1% rise in the benchmark rates corresponds to an approximate 10% increase in payment shock.  (From Mortgage Daily News)

Read More:   www.mortgagenewsdaily.com/01132010_rmbs_fitch_io_loans.asp

Unsure  how to read your loan documents and what they mean ?

Call or email me, Kathleen  Tel: 415-793-3040  Email: Kathleen@ForeclosuresMarin.com