Yes, it seems counter-intuitive.

If you have bad credit, you should have to pay a higher interest rate on your loan.

But, it makes sense.

The lender is assuming a higher risk, so he/she should be compensated for it.

Of course, the question is, if you charge a higher interest rate, are you therefore making it even harder for the borrower to pay you back?

I don’t know.

From today’s Globe:

DEAR BOB: When my sister sold her property, she carried back an interest-only first mortgage at 20 percent interest with a balloon payment due in 12 months. The buyer paid for only four months and is now in receivership. What should she do? Is there a time limit to file her claim? Does she need a real estate lawyer? –Roselyn S.

DEAR ROSELYN: I am shocked at that outrageous 20 percent interest rate. Your sister should hire a real estate attorney to file a claim with the property receiver. But I highly doubt she will get paid that unconscionable interest rate.


The borrower paid for four months, then bailed out, leaving the lender in the hole, with little chance of recovery.

Sounds like she didn’t charge a high-enough interest rate.

Source: Let me take that vacant lot off your hands – By Robert J Bruss, Inman News, by way of The Boston Globe (second item)

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Updated: 1st Quarter 2018

Author Profile

John Ford
John Ford

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs

In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.


For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.


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John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.

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Ford Realty Inc
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