Posted on: 27th Mar, 2007 02:37 pm
i have a 30/15 balloon mortgage. i borrowed 37,400 at 6.374. How much will I owe and when? a friend said i have to pay a lump sum at the end of 15 yrs. is that true?
Hi Newbie,
"a friend said i have to pay a lump sum at the end of 15 yrs. is that true?"
Actually you will have to pay off the loan at the end of 15 years.
In your 30/15 balloon mortgage, the rate will remain fixed for 15 yrs. & the payment calculation will be amortized over a period of 30 yrs. ( means what payments would have been if it was a 30-year mortgage), which gives you a lower monthly payment.
The loan will become due at the end of the 15 yr. period.
David
"a friend said i have to pay a lump sum at the end of 15 yrs. is that true?"
Actually you will have to pay off the loan at the end of 15 years.
In your 30/15 balloon mortgage, the rate will remain fixed for 15 yrs. & the payment calculation will be amortized over a period of 30 yrs. ( means what payments would have been if it was a 30-year mortgage), which gives you a lower monthly payment.
The loan will become due at the end of the 15 yr. period.
David
Hi Newbie,
Welcome to the forums.
A 30/15 year balloon loan is a fixed rate mortgage for which you will make monthly payments as one has to do for a 30 year fixed rate loan. But the loan has to be paid off at the end of 15 years. So, you will have to pay down the loan balance including unpaid loan amount and interest for the next 15 years (out of total 30 year payments) at the end of the 15th year. The loan balance paid off in a lump sum amount is known as the balloon payment.
For the calculations on the balloon payment, you can calculate the total payment made for the first 15 years and the total payment on a 30 year loan. Then you can subtract the former from the latter to get the amount you will pay in lump sum.
You may use our Fixed rate mortgage payment calculator for simple calculations.
Thanks,
Sara
Welcome to the forums.
A 30/15 year balloon loan is a fixed rate mortgage for which you will make monthly payments as one has to do for a 30 year fixed rate loan. But the loan has to be paid off at the end of 15 years. So, you will have to pay down the loan balance including unpaid loan amount and interest for the next 15 years (out of total 30 year payments) at the end of the 15th year. The loan balance paid off in a lump sum amount is known as the balloon payment.
For the calculations on the balloon payment, you can calculate the total payment made for the first 15 years and the total payment on a 30 year loan. Then you can subtract the former from the latter to get the amount you will pay in lump sum.
You may use our Fixed rate mortgage payment calculator for simple calculations.
Thanks,
Sara
ya i think your friend is telling the truth you have to to rpay at the end of 15th year
$26,998 is the estimated balance at the end of 15 years based on the information you gave. Of course, this assumes that you don't make any extra principal payments on your loan.
At the end of 15 years you either pay that amount or refinance.
At the end of 15 years you either pay that amount or refinance.
