Paid 8 years, don't know what we owe

[CindyKM]

New Mexico

We bought a house in 1997. My husbands parents financed it for us. It was set up thru a lawyer at 5.5% interest for 17 years. We have been paying on the house for 8 yrs. We have never recieved anything showing what we have paid in interest or principle. Instead of setting up an escrow account, the payment goes straight into their personal account. He is the only one keeping track of the payment. I just asked my mother-in-law about him giving us something to show what interest we had paid. She said she was sure he had something, after all he figured out what interest we pay at the end of every year. About a year ago, my father-in-law told my husband all we were paying was interest, and nothing on the principle. I'm sorry, but this just doesn't seem right. I ran an ammoritazation schedule to show what we might have paid. And the principle on the house is down alot according to that. How can he figure the interest on a yearly basis, when we make monthly payments, and then to top it off, I don't think he is going to give us anything to show what we've paid in interest or principle. How do you handle an idiot like this.

[seniorjudge]

Originally Posted by CindyKM

New Mexico

We bought a house in 1997. My husbands parents financed it for us. It was set up thru a lawyer at 5.5% interest for 17 years. We have been paying on the house for 8 yrs. We have never recieved anything showing what we have paid in interest or principle. Instead of setting up an escrow account, the payment goes straight into their personal account. He is the only one keeping track of the payment. I just asked my mother-in-law about him giving us something to show what interest we had paid. She said she was sure he had something, after all he figured out what interest we pay at the end of every year. About a year ago, my father-in-law told my husband all we were paying was interest, and nothing on the principle. I'm sorry, but this just doesn't seem right. I ran an ammoritazation schedule to show what we might have paid. And the principle on the house is down alot according to that. How can he figure the interest on a yearly basis, when we make monthly payments, and then to top it off, I don't think he is going to give us anything to show what we've paid in interest or principle. How do you handle an idiot like this.

Q: How do you handle an idiot like this.

A: Tell your husband to start keeping better track of the bills.

[CindyKM]

New Mexico

I have copies of every check written for the house payment. I HAVE AN AMORITIZATION SCHEDULE, WHICH I RAN OFF. Its not my husband with the problem, its his Dad. He's the one who holds the note, he's the one who won't let us know what we owe. It's not that we don't keep track on our end, just can't get what we need from him. Got any better ideas???

[Sirena7cs]

Yes, did you sign the note with your father-inlaw and do you have a copy of it? Was the note recorded?

It should state what the terms of the note are, ie, interest only or principle and interest, the financed amount, interest rate and term/length. If any prepayment or late penalties.

If you can tell us what the specifics of the note/loan are and what you have made so far in payments, how many months and how much, we should be able to tell you what the remaining balance is.

Also, you really should be getting some yearly statement from your father inlaw, so you can write off the yearly interest on your primary residence against your earned income on your income taxes. Have you not been doing this for the last 8 years???

Pls, let us know more about your situation. I am concerned.

S

[matti422]

What's the legal issue here? If you know the ammortization tables, the interest rates and what you have been paying, then you know what you owe. Is Dad not letting you pay off the loan?

[Sirena7cs]

P.S I saw that you said the a lawyer had set up the loan for you. So if you don't have a copy and your father inlaw is reluctant to give you a 'signed' copy then you should ask this lawyer who did the arrangements for one, or how to get one.

P.S.S Always get a copy of anything you sign.

[Sirena7cs]

Originally Posted by matti422

What's the legal issue here? If you know the ammortization tables, the interest rates and what you have been paying, then you know what you owe. Is Dad not letting you pay off the loan?

Matti, she is just looking at her own ammorization tables, she thinks her payment should be paying down the principle, father inlaw is saying it's 'interest only'.

One way or another she and her husband should be getting a yearly statement for tax purposes and know what kind of loan they've got.

[CindyKM]

We have copies of everything we signed. Its supposed to be set up at 5.5% int. figured monthly. My father-in-law will not and has not sent us anything in the last 8 years showing what we have paid in interest and principle. We make monthly payments not yearly, but according to my mother-in-law it is figured on a yearly basis. We have not been able to use what interest we pay in figuring our taxes. Also a few years ago we thought we were going to have to move out of town. My father-in-law tried to tell my husband we couldn't sell anything, because he held the note and he said so. (In his dreams).The main thing i would like to do is to be able to get out from under him. He has the attitude that its all his and he can do as he likes, even though there are signed papers and we pay him. We bought a shop along with the house, my husband has had to change the locks at least four times in the last 8 years, to keep his dad from coming in and helping himself to my husbands tools. Sorry but this lady is tired of waiting for other people to handle the situation. I happen to know a lot more than my father-in-law gives me credit for. I was a loan secretary for 4 years. I just wanted to see if he actually has a leg to stand on in the way he has done us.

[Sirena7cs]

One more thought...your father inlaw should be reporting interest earnings on his taxes. You might want to remind him of this.
Also why don't you just refinance and cut the cord?

[LindaP777]

CindyKM

Is the deed in YOUR (and/or husbands) name?

Was the mortage (held by your father-in-law) recorded?

Who pays the property taxes?

You should have been getting major tax breaks each and every year for the interest you paid (your father-in-law) on your loan (he also should have been claiming the interest he's earned on his taxes).

[LindaP777]

Originally Posted by Sirena7cs

Also why don't you just refinance and cut the cord?

EXCELLENT IDEA!!!

[CindyKM]

New Mexico
Thats what were looking at. Actually we would like to sell the house and look for something different. But there again, how can you refinance or sell if you don't know what you owe! Oh and as far as my father-in-law showing the interest on his taxes, my mother-in-law told me they didn't even file taxes last year, she said their bookkeeper said they didn't need to. Go figure! You have income, you report it. I don't know whats going on here, but I am going to find out. Oh, and my husband and I pay all the taxes on the house, and everything has been recorded. I just don't get this situation myself. It has been a mess from day 1. Believe me. I'm thinking of calling the Lawyer who drew up the mortage papers and see what he has to say about it.
The deed is in mine and my husbands names.

[LindaP777]

Go look at your agreement that you signed. Does it say "interest only" or "principle and interest" payments? Call the attorney if you have to.

You have not claimed any interest on your federal taxes? Do you do your own taxes???

[LindaP777]

Originally Posted by CindyKM

my husband and I pay all the taxes on the house, and everything has been recorded. The deed is in mine and my husbands names.

If the deed is in your name, then your FatherInLaw can not stop you from refinancing or selling (of course you'll have to pay off the mortage held by your FIL). You'll need to see if your mortgage (held by FIL) states "interest only" or "principle and interest". If you pay your own property taxes separately (not escrowed), it should be easy to figure out if you are paying P&I or just interest. Anything above Interest, would no doubt apply to the principle amount of the loan (unless your FIL stuck some freaky "I pocket the extra money" clause). WAS IT A FIXED INTEREST RATE, or adjustable??? If it's adjustable, what are the details? (has it adjusted? if so, to what interest rate? what's the cap?)

BTW - interest is calculated yearly, even if your payments are set up monthly - there's nothing odd about that.

Use this handy-dandy amortization calculator: [url]http://ray.met.fsu.edu/~bret/amortize.html[/url] enter your original loan amount (how much did FIL loan you?) and interest rate (5.5%) based on how long? Was it 17 years? It shows what you payments (P&I) should be. You can also figure out what just interest only payments would be. (If you post detailed information, I'd be happy to help you. Oringinal amount of loan (i.e. $125,000), Interest rate (5.5%), term (interest only or Principle & interest) and well as the length of the loan (17 years? 30 years is typical). Monthly payments on $125,000 at 5.5% fixed interest for 17 years (principle & interest) would be $944.51. An interest only loan, with the same terms, would only be $572 per month (big difference in payments, especially on a 17 year loan where a bigger chunck of the payment each month would be applied to principle, than in a 30 year loan).

Who selected the attorney who drew up the documents and recorded them? Please tell me it wasn't your father-in-law???

I would also speak to an accountant about amending your federal tax returns and deduct all the interest you paid, as well as property tax. No doubt, the IRS will be owing you quite a bit of money!

[CindyKM]

New Mexico
According to what our payments are, and using the amoritization schedule, we are paying interest and principal, oh and yes the FIL did pick out the attorney. When we signed the papers between us and the people we bought the property from, the in-laws weren't there. We didn't sign anything with them right there. I think about it now, and I think they came and signed their part before we ever went in to sign. The bad thing or who knows maybe good is the lawyer is a good friend of my husbands, they grew up together. Like I said don't know if that is good or bad. With the payments not going thru the lawyer or an escrow account, we seem to be stuck in a hole. There is no third party to say here's what you've paid and what you owe. The FIL is doing all the paper work, and sorry to say this, but don't trust him as far as I can throw him. Its bad when you feel like family has pulled something crooked on you. My FIL likes to hold our house and shop over my husbands head, and I'm sick and tired of it. Oh and one of the reasons I'm not sure about the lawyer, we had sat down and agreed on terms with my In-laws, payments were to have been cheaper and terms longer. The day before we signed on the house, my fil told my Mother, that the lawyer had changed everything, because he thought we needed to pay higher payments, so they could get paid of faster, hence the 17 yrs. And no none of this was ever discussed with us. My husband felt like we were in a situation where we didn't have any choice except to go along with that.(Man wish I would've had more backbone then! Oh well I got it now!!) So like I said this has been a mess since day one.