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Thank you Jeff!!!
I guess I was wasting money!!!
A friend of mine once told me that the only way this kinda payment
would work out without being "too heavy for your pocket" would be to
send the minimum payment plus let's say $300,00 more towards principal.
That would be less than paying the I/O option and could help in not
having the negative amortization! But I guess she was wrong and I was a
foul!
By the way, do you know if it can be fixed for 3 to 5 years or it's
just another lie??!!
Thanks for your time!!!
Jeff Strickland wrote:
> No. You _could_ add funds to a neg am payment and still incur a neg am on
> the loan. To avoid the neg am, you have to make the Interest Only payment.
>
> Firstly, if you make the Minimum Payment, you will have a neg am. If you
> make a larger payment, you select the Interest Only option. If you make a
> larger still payment, you will pay off in 30 years, and the highest payment
> will pay off in 15 years. You can add funds to the 15-year payment if you
> want and pay off earlier, but if you could do that you would not be a good
> client for the loan product or, more accurately, the loan product would not
> be good for you.
>
> Why would you make the Min Payment + extra, but not enough to make the
> Interest Only payment?
>
> You don't have a neg am UNLESS you make the Minimum Payment, or any payment
> that is less than the Interest Only. In theory, you _could_ make the
> Interest Only + extra, but below the 30-year payment. This would result in a
> principle reduction, but the pay off would still come in 30 years because
> they "recast" the principle balance every month to make the payments work
> out to 30 or 15 years. Interest Only payments pay the interest that is due,
> therefore no interest is added to the principle -- there is no neg am. The
> Negative amortization comes when the payment received does not cover the
> interest that is due.
>
>
>
>
> "mabdala2006@hotmail.com" <brunoaraujo2004@aol.com> wrote in message
> news:1165791764.816195.25310@l12g2000cwl.googlegroups.com...
> > Is it true that if you send a extra money with your minimum payment
> > option every month, you'll be able to not have a negative amortization?!
> >
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Re: 4 payment options
