Is it legal that a home modification program add 20 years to your loan and you end up paying more than it is worth?

UPDATED: Sep 30, 2022

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Is it legal that a home modification program add 20 years to your loan and you end up paying more than it is worth?

Going through home modification and just received contract. It added 20 years to the 20 I had left. And if I live to finish the payments it will be a total of $469,000.

Asked on August 8, 2017 under Real Estate Law, Louisiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, it is legal, so long as the important information was disclosed to you prior to you committing to the loan--and that means that even if you did not fully understand it, as long as it was available to you, it is legal. A loan does not have to be a good deal; people can and do legally take out loans that they should not, based on the interest rate, the payment terms, the cost of the loan vs the value of the item they are buying, etc. The law does not protect us from bad choices or transactions; it only requires that the key terms be disclosed before you sign. 
So if you received the contract, see that it has bad terms, but have not signed it yet, that is legal--they did what they should, in providing all terms pre-signing. You can walk away from it and refuse to sign and be obligated if you have not signed yet; or if you do sign with knowledge of the terms, you will be obligated to them.

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