Law Office of Allan E. Dunaway, PLC

Mortgages not well understood by homebuyers

Financial documents can be confusing. Mortgage loan documents can be more confusing than most, because most people only purchase a home once or twice in their lifetimes, and have few chances to gain experience with the process. The mortgage crises of the last decade showed that many borrowers failed to understand the implication of the documents they were signing. And that failure had monumental consequences when those borrowers began to default on the loans they could not afford. For many, it led to foreclosure and bankruptcy.

The recent survey from Zillow, a real estate website, found that almost 30 percent of homebuyers did not understand how to choose a lender or obtain the best financing. Many did not understand what terms like "annual percentage rate" (APR) means, and we assume, failed to grasp what a difference in rate means over a 30-year mortgage.

As the article explains, a half percent in APR can mean $10,000 in savings in interest payments during the life of a mortgage. If you use that to pay down principle, you can cut three years off the term of the mortgage.

If you have fallen behind in your mortgage payments and are worried you may lose your home, you should consider speaking with a bankruptcy attorney. A Chapter 13 bankruptcy can allow you to pay your arrears over up to five years.

In addition, you may be able to discharge a portion of your unsecured debts, like credit cards, that will free up money to pay towards your mortgage. This may allow you to regain your financial stability and save your home from foreclosure.

Source:, "Homebuyers clueless about mortgages," Les Christie, May 9, 2013

No Comments

Leave a comment
Comment Information
Contact the Firm

Get Sound Advice In A Free Consultation

For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Kentucky Office

Indiana Office

714 Lyndon Lane
Suite 4
Louisville, KY 40222

Phone: 502-785-1005
Fax: 502-412-2258
Louisville Law Office Map

530 East Court Avenue
Jeffersonville, IN 47130

Phone: 502-785-1005
Fax: 502-412-2258
Jeffersonville Law Office Map