i don't really understand what balloon mortgage/loan means in real state?

Question

please give me an easy meaning that i could understand easily what balloon mortgage means?

Answer 1

A baloon loan is basically designed to give you a very low interest rate compared to a traditional 30 year fixed mortgage. The bad thing about a baloon is that you will owe the remainder of your remainder balance when the ballon period comes. Usually 5 10 or even 15 years

Answer 2

Basically, at a designated period of time your entire mortgage will be due in full or a large part of it. An example is a 7 year balloon. You pretty much are only paying interest and at the end of the 7th year you make a "balloon payment" of the entire amount.

Not all balloons are the entire mortgage. Some are higher payments on the principal and interest.

Typically people get a balloon mortgage if they know the property value will go up significantly before the balloon and get out with a profit. Or if you can't afford the payment of the home at first but you anticipate it later.

I hope this answers your question.

Answer 3

A balloon payment is simply one very large payment. In almost all cases, the balloon payment will be for the entire remaining balance of the loan. Many times, at least on first mortgages with balloon features, there's a conditional right to refinance, where you can take a one-time rate adjustment and refinance the loan for the remaining term of the loan.

For example, you take a 5 year balloon, with a 30 year amortization. This means you will have a fixed rate for 5 years, with a payment based on a 30 year term. After 5 years, on your 60th payment, you will have to pay back the entire loan, or refinance for the remaining 25 years.

Answer 4

A balloon mortgage is a mortgage that the payment is based on a certain payment period, but a lump sum payment is due at an earlier date. For example, you could have a mortgage where the payments is based on a 30 year payment period, but the loan is expected to be paid off in 15 years either by a balloon payment of the balance due, or a refinance.

Answer 5

You start off with little payments, but at the end is one really big payment.

Imagine with this scenario for a $50,000 house in ten payments, the last being a balloon payment.

$1000
$1000
$1000
$1000
$1000
$1000
$1000
$1000
$1000
$41000

Does that last payment look a little out of place? It is incredibly larger than the other payments. A balloon payment is a useful tool in certain real estate transactions. However, it should not be used by someone buying their house for themselves. Not unless you are 100% certain you will have the money to make the balloon payment. Otherwise, you lose the house and what you put into it.

Answer 6

An example would be: your mortgage payments will be calculated (amortized) like you are paying over 30 years, but your balance is due at the end of 15 years. The final payment is the balloon payment. Hope this makes sense!

Answer 7

A balloon mortgage means it expires at a predetermined date and you have to pay it off. Most people just get another mortgage to repay the first one.

Answer 8

Jesus was the ultimate sacrifice. In other words He met all the requirements to be able to enter into the Holy of Holies. We now can have a relationship with God the Father through Jesus Christ. We have no need of any other mediator for our High Priest is Christ. The law was fulfilled through what Christ had done but, He did not abolish the law of the Ten Commandments but rather made them even more stricter than before. You can see this beginning in Matthew 5 through chapter 7. These are guidelines that we are to live by. Thanks for asking and God Bless you. :)

Answer 9

i.e. in a five year balloon you pay a lower monthly payment for five years then you have one big payment at the end. You would have to refinance it then and a lot can change in five years (your credit, income, job time, interest rates etc.)

Answer 10

I think it means you will have to pay it off at one time by a certain date.You don't pay notes, you just have to pay it all at once