So a bit confused on what to do here. Recently got married and my wife and I moved into our first home together. Didn’t have enough for a 20% down payment, and wanted to avoid PMI, so my very well off cousin offered me a loan at a rate of 10% for 150k. I was so excited to get money for a down payment that I mostly glanced over his contract which had monthly payment at about 1500 a month. Didn’t seem so bad to me and my cousin was really selling it to me that was a super common loan type and was giving me a great rate.
Once the excitement of getting the home calmed down a bit, I realized that that none of the 1250 dollars I pay him per month goes to the principle whatsoever, only the “interest”, something I’ve never experienced before. Furthermore, after 5 years (the duration of the loan), he is to receive full principle outstanding or else “claim deed to property”.
When I questioned about this, he just encouraged me to pay more than the interest each month, so I can pay off the principle faster. However at 1250 a month of just interest, I’m looking at 3000+ a month to even make a dent on top of my mortgage.
Guess my main question here is, did I just get worked over by a family member or are these terms/rates fair? Any advice on how to deal with the situation? Getting quite scared how I’m gonna pay this off.
Submitted February 03, 2022 at 03:01AM by No_Pineapple_4609 https://ift.tt/qrDXOhRfE
