We have done a lot of reading and cannot find the exact situation we have and I just want to make sure we get this done correctly.

Ok, we have several consumer real estate balloon loans. These loans are not at maturity yet, but in the current rate environment we have gotten our first question (and are anticipating more) about extending the maturity of the loan to, in essence, lock the current rate for a longer period of time.

The question is, can we charge a fee for this extension of a consumer real estate loan? How would this fee fall outside the APR disclosures we gave at closing. I have read a lot of the Regs, but have not found an exact reference that I am comfortable with yet. Yes, our legal counsel says our current loan forms would allow this in our states of operation.

Thank you in advance for your thoughts.

The question is, can we charge a fee for this extension of a consumer real estate loan?

That is purely a matter of State law. State law governs allowable charges.

Unless what you are doing is a refinance under 1026.20(a), then Reg. Z is not a consideration. If all you are doing is a modification to extend the current term of the loan, then is should not fall under 1026.20(a).

I am wondering if one can add the cost of the extension fee onto the existing loan amount?

That would be a contractual issue unless state law prohibits it.