i just took a balloon mortgage of $53611, how does it work? this is not my primarly morgage, it is my second morgage.
2007-05-13 09:59:56 · 4 answers · asked by meeee_3 2 in Business & Finance ➔ Renting & Real Estate
It looks like you have an interest only 2nd mortgage. A balloon mortgage may be amortized over a 30 year payment period or require that you make interest payments only during that period, BUT!!!! it has a large or full principal payment due at a designated date (ie 5 to 7 years). At which time, you either have to make the full payment by either selling your house and cashing out or (more typically) refinancing the full balloon payment. Under the deal you described, after a certain number of years, you'll have to refinance the $53k (plus possibly any accrued interest) when the balloon is due. If you're only paying interest or a portion of the interest, the balloon could grow significantly (negative amortization), so don't be surprised when they require you to pay significantly more when the balloon is due
2007-05-13 10:31:47 · answer #1 · answered by therainbowseeker 4 · 1⤊ 0⤋
You pay a certain amout for a set number of payments or years. The balance at the end of that time is called the balloon. You have to refinance at that time.
2007-05-13 17:03:32 · answer #2 · answered by desertflower 5 · 0⤊ 1⤋
A ballon mortgage is when you have a very large payment at the end of the mortgage...it makes the monthly payments smaller.
2007-05-13 17:05:52 · answer #3 · answered by flygirl76 1 · 0⤊ 1⤋
At some point in the future, you've got some WHOPPING LUMP SUM DUE!
Plan for it by keeping your credit great so you can refinance outta that house in the future!
2007-05-13 17:04:32 · answer #4 · answered by kevc21 3 · 3⤊ 0⤋