Has anyone had personal experience with a balloon payment on a mortgage, good or bad? Please, only those who?

Question

have personally dealt with this.

I am looking at this as a possible option for lower interest rates on a 2nd mortgage. A locked rate for 15 yrs. in which at 15 yrs. a balloon payment is due.

Answer 1

Your dilemma weather or not to take a second mortgage with a balloon payment really depends on your situation and what your cash out is fort if you are taking a Home equity line of credit it is typically an interest only payment and you can draw on it for 10 years. 15 years is a pretty safe amount of time to have a balloon payment the loan can be refinanced at any time
If you are taking a fixed rate loan for 15years why not take one that amortizes and pays off in 15 years it has no affect on the interest rate only the payment if it is the smallest payment you are looking for then an interest only payment with a balloon is your best option. However, If you are looking
for the lowest payments you should check into refinancing your first and pulling cash out. There are many solutions out there speak with someone that will give you all of your options I would be more then happy to assist you in any way feel free to contact me at my web site if I can be of further assistance.

Answer 2

A balloon mortgage means the remaining purchase price is due on a certain date. Which you will want to start your loan process about 3 to 6 weeks prior to the due date with your mortgage lender. If your property is owner financed for 1 to 2 years before your balloon mortgage is due, should give you ample time to straighten credit issues, if any. So therefore, it is not a bad thing. Your payments and interest will depend on your credit rating. Hope this helps!

Answer 3

It is my assumption that you have a mortgage with a balloon payment. Therefore, I will assume that you entered into the mortgage agreement/payment with an adjustable rate mortgage. If this is the case, your rate is most likely increasing as we speak, and you are worried about re-financing along with the balloon payment and possible early termination fees. Either way, both pre-payment penalties and balloon payments are a negative in my book.

If you could be more specific, I may be able to give you a more specific answer.

Answer 4

Sorry have not been there because I have not been and no offense meant stupid enough to end up with a balloon payment. Pay an only interest due payment then all of a sudden the whole thing plus interest is due. Sorry worst financing offer that has been available and is basically set for people to lose their homes.