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30 Trap

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Justice247

Junior Member
Louisiana

Do I have any legal grounds to seek some type of forgiveness from my bank on any portion of a loan, which seems to be a lemon. I will express the situation, a loan of approximately 36,000 was financed for 30 years, however in the contract, the loan agent did not clearly state it would be for 30 years, nor did the bank send me monthly statements to show my balance over the 4 and 1/2 year time spand. Moreover, if the bank would have fulfilled its obligation to provide clear information about the loan by means of expressing such an obligation was a financial disaster, with the notion and obligation of caring for the customer. I would have not agreed to such terms and conditions and if I would have been provided statements as I believe a customer should have the right to monthly, I would have personally taken my self out of such a financial trap and disaster. As a result when I finally saw my balance I was so upset because out of the approximately $14,000 paid only about $1200 went to the principal.
 


Zigner

Senior Member, Non-Attorney
Louisiana

Do I have any legal grounds to seek some type of forgiveness from my bank on any portion of a loan, which seems to be a lemon. I will express the situation, a loan of approximately 36,000 was financed for 30 years, however in the contract, the loan agent did not clearly state it would be for 30 years, nor did the bank send me monthly statements to show my balance over the 4 and 1/2 year time spand. Moreover, if the bank would have fulfilled its obligation to provide clear information about the loan by means of expressing such an obligation was a financial disaster, with the notion and obligation of caring for the customer. I would have not agreed to such terms and conditions and if I would have been provided statements as I believe a customer should have the right to monthly, I would have personally taken my self out of such a financial trap and disaster. As a result when I finally saw my balance I was so upset because out of the approximately $14,000 paid only about $1200 went to the principal.
I don't believe for a second that the paperwork didn't tell you the term of the loan. You do know that 360 months = 30 years, right?
 

Justice247

Junior Member
I don't believe for a second that the paperwork didn't tell you the term of the loan. You do know that 360 months = 30 years, right?
Due to the overall situation buying a home at the same time and having to have this land loan on the side, I did not know it was for 30 years, it was not clearly stated due to it being set up in balloon payments every 5 years.
 

Zigner

Senior Member, Non-Attorney
Due to the overall situation buying a home at the same time and having to have this land loan on the side, I did not know it was for 30 years, it was not clearly stated due to it being set up in balloon payments every 5 years.
Again, I am sure the document is clear. But, it really doesn't matter. Simply pay it off earlier, as you were apparently planning to do. I mean, you assumed the loan was for a much shorter period, right?
 

Justice247

Junior Member
Again, I am sure the document is clear. But, it really doesn't matter. Simply pay it off earlier, as you were apparently planning to do. I mean, you assumed the loan was for a much shorter period, right?[/QUOTE
Yes. I truly thought it was for a shorter period, I just feel like I have already wasted so much money in interest, thanks!!
 

Zigner

Senior Member, Non-Attorney
Yes. I truly thought it was for a shorter period, I just feel like I have already wasted so much money in interest, thanks!!
Then I don't understand the problem...simply pay it off in the time period you expected. Of course, that means making larger payments.
 

Gail in Georgia

Senior Member
"I truly thought it was for a shorter period, I just feel like I have already wasted so much money in interest"

You mean the interest you have (hopefully) had the good sense to take off your taxes as a legitimate tax deduction over the past four years?

Home mortgage loan payments typically go to pay the interest FIRST for a number of years in the beginning of the loan. As the loan progresses, it is not unusual that it no longer becomes a good tax incentive for some folks because the majority of the payment IS going toward the loan and less toward this tax deduction.

For the vast majority of folks, the mortgage interest on their home loan IS their biggest tax deduction.

IF you decide to make additional payments and want these payments to go ONLY toward the principle, make certain you indicate this to the financial institution holding your mortgage.

And, as others have indicated, it was YOUR responsibility to understand you were signing for a 30 year loan at the time you were signing all those reams of papers at closing. And the bank has NO legal obligation to send you MONTHLY statements regarding how much of what you are paying goes to your loan and how much to interest. Did you not receive a booklet of "coupons" to tear off to send in with your payments? If so, the breakdown of principle versus interest should be outlined on each of those.


Gail
 

Justice247

Junior Member
Again, I am sure the document is clear. But, it really doesn't matter. Simply pay it off earlier, as you were apparently planning to do. I mean, you assumed the loan was for a much shorter period, right?
"I truly thought it was for a shorter period, I just feel like I have already wasted so much money in interest"

You mean the interest you have (hopefully) had the good sense to take off your taxes as a legitimate tax deduction over the past four years?

Home mortgage loan payments typically go to pay the interest FIRST for a number of years in the beginning of the loan. As the loan progresses, it is not unusual that it no longer becomes a good tax incentive for some folks because the majority of the payment IS going toward the loan and less toward this tax deduction.

For the vast majority of folks, the mortgage interest on their home loan IS their biggest tax deduction.

IF you decide to make additional payments and want these payments to go ONLY toward the principle, make certain you indicate this to the financial institution holding your mortgage.

And, as others have indicated, it was YOUR responsibility to understand you were signing for a 30 year loan at the time you were signing all those reams of papers at closing. And the bank has NO legal obligation to send you MONTHLY statements regarding how much of what you are paying goes to your loan and how much to interest. Did you not receive a booklet of "coupons" to tear off to send in with your payments? If so, the breakdown of principle versus interest should be outlined on each of those.


Gail

Thanks so much for your input, unfortunately since I used automatic drafts for payment, there were not any coupon books.
 

Zigner

Senior Member, Non-Attorney
Thanks so much for your input, unfortunately since I used automatic drafts for payment, there were not any coupon books.
Yes, there was. They came at the beginning of the loan. You may never have used them, but you got them.
 

tranquility

Senior Member
Absent a pre-payment penalty, you can always pay off a loan before it is due. You did not pay "extra" interest on the loan, you paid the interest due on the money. The amortization length has to do with the payment you make. If you would have made a greater payment each month, you would have had more principal reduced.

You knew or should have known the interest you were being charged on the loan. As the others have said, pay it off or refinance it if the terms do not meet your needs.
 

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