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What can I do if I cannot repay the loan?

2 options:

1. The borrower always has an option to refinance with a conventional lender and pay off the loan at or prior to the balloon maturity date. The borrower is always advised to ask the seller for "no prepayment penalty clause" in the mortgage that releases the borrower from paying any kind of penalties for paying off the loan earlier.

2. The borrower can approach the note holder (seller) and ask to extend the loan at the current rate or different terms. If seller agrees, a simple modification of the loan can be recorded.

As to option 2, what are the costs, do I need to pay the typical closing costs? Who handles the paperwork?

Thanks

Any title company can handle preparing and recording a mortgage modification. They can charge anywhere from $50 to $200 plus a few dollars for recording. The county does not charge doc. stamps on mortgage modifications.

Obviously, if you chose option 1 from above, then you would have to pay typical closing costs for a refinance.

Any title company can handle preparing and recording a mortgage modification. They can charge anywhere from $50 to $200 plus a few dollars for recording. The county does not charge doc. stamps on mortgage modifications.

Obviously, if you chose option 1 from above, then you would have to pay typical closing costs for a refinance.
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