2007-07-22 02:59:24 · 3 answers · asked by keithleong 1 in Business & Finance ➔ Renting & Real Estate
No, it is not a good choice. A bubble is a massive payment at the end of the loan.
2007-07-22 03:14:21 · answer #1 · answered by oohhbother 7 · 1⤊ 0⤋
The bubble or more commonly a balloon means that after you make all of the payments as agreed that you still owe money!
The reason that you would do this is if you think that you can get better financing when the balloon payment is due (or expect a financial windfall).
Pros: It will make your payments smaller
Cons: If you can't pay the balloon (or refinance it) you will be OUT ON THE STREET!
It's a tough way to go... even if things are good you have to wonder everyday... what if I lose my job or my credit goes to Hell... You won't be able to refinance it. To make it worse most people that are offered this type of loan have a hard time with financing anyway...
I would think hard before doing this.
Good Luck!
2007-07-22 10:21:39 · answer #2 · answered by catastrophekid 3 · 1⤊ 0⤋
I would not suggest getting this type of a loan. Balloon payments are what alot of the people who are ending up in foreclosure received when dealing with lenders who wanted to make a quick dollar. Make sure you understand the process because the lender that you speak with may not be the lender you have in the end. Most banks sell their loans because that is where they make their money.
They prey on people who don't know how the process works.
2007-07-28 19:54:51 · answer #3 · answered by Anonymous · 0⤊ 0⤋