what is a “balloon payment” in relation to an interest only mortgage loan?

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  1. Reply
    David Y
    January 24, 2011 at 3:41 am

    bit by bit payment

  2. Reply
    January 24, 2011 at 4:30 am

    A balloon payment is a large payment made at the end of the loan. In the case of an interest only mortgage, your monthly payments only cover interest, not repayment of the capital you borrowed, so at the end of the term of the mortgage, usually 25 years, you have to pay back the full amount you borrowed.

  3. Reply
    Age of Reason
    January 24, 2011 at 5:29 am

    You would have to go through the entire process again when you first bought the house.
    Find a lender willing to give you a mortgage

  4. Reply
    January 24, 2011 at 5:45 am

    You must contact your lender to see what it might offer. There are no ‘programs’ which require a lender to do anything to modify your loan(s). The lender may simply extend the balloon mortgage beyond its expiration.

  5. Reply
    Patrick Lea, Realtor(R)
    January 24, 2011 at 5:50 am

    I am a Realtor(R) and was a lender for about 10 years…. I deal with this sort of thing all the time. It really depends upon what your current finances are, how much you owe, and how much the house is worth.

    If you have a good enough LTV (loan to value), good credit, and good income, you might be able to just do a straight refi.

    If you are underwater (high loan, low value) and have less income at the moment, it depends upon the bank. Some are reasonable, some are not.

    I have seen a person get a 30 year fixed modification at 2.5% to avoid foreclosure, and that person had atrocious credit, almost no income, and ultimately lost the house any way.

    I have also seen a person who had great credit right up until they lost their job, got behind, got a new job for less money, and the bank refused to talk at all.

    Feel free to email me directly at Webmls@cinci.rr.com and I can help point you in the right direction.

  6. Reply
    January 24, 2011 at 6:45 am

    The same as for anyone else.

    You need to contact your lender to find out what you might qualify for.

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