Legal Question in Real Estate Law in New York

Mortgage Interest Rates

I have had a mortgage for almost 3 years now, and when I first obtained thie loan, it was at around 9.4%. I am young and had little credit. This mortgage was sold right after I closed on the property. Every 6mos, I have had an increase of my interest rate of 1%. I want to know if this is legal. I am sure it is because they are doing it. I have talked to them multiple times about this (them being the mortgage company) and all's they tell me is that that is how my loan is set up. I understand that you sign a contract, and i understand that interest rates can go up, but how can it be legal that EVERY 6mos, the rate goes up a whole percent. I am drowning and I am trying to refinance, but I was out of work for a period of time due to a family tragety and I am now working but with every letter I get from this mortgage company I cringe, wondering what is next. Thank you


Asked on 4/24/06, 8:56 pm

2 Answers from Attorneys
Debra Palazzo Law Offices of Debra Palazzo, LLC

Re: Mortgage Interest Rates

Read your Note and see what the terms are and what the rate is tied to. Then you can follow that index and make sure you are being charged correctly.

Your rate is MUCH too high. If you have been paying on time for the last 2-3 years you will be able to re-finance. Especially since the house is worh more now and you will have an equity cushion. Start shopping.

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Answered on 4/24/06, 11:53 pm
Robert R. Groezinger GroezingerLaw P.C.

Re: Mortgage Interest Rates

You probably have an ARM (adjustable rate mortage) where the rate change is every 6 months.

If your credit has improved, and there is no prepayment penalty, look for a better deal.

Good Luck

RRG

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Answered on 4/25/06, 7:23 am


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