Posted on: 06th Apr, 2009 12:34 pm
We are buying a home for 79,999.00 owner finance @ 6.5% with 10% down, we pay taxes and insurance. But it has a 5 year ballon payment. Does that mean we can get get a loan, morgage or what? I've not signed the paperwork but would really like some advice. Please help, Thank you
You have to very becareful of Ballon Payments, If you can't make the payment you could lose your house.
But could I apply for a loan or something within the 5 years?
herbalady, the 5 year balloon means simply that the entire amount that you owe at that time is due and payable to the owner in full. you'll have to go get a loan at that time to pay it, unless you've already paid the full sum to him.
if your loan with the current owner will not call for a penalty in the event you pay it off early, you can apply for a new loan to pay it off at any time. read your contract documents very closely, and have your lawyer (i assume you've got one) be on top of this also.
if your loan with the current owner will not call for a penalty in the event you pay it off early, you can apply for a new loan to pay it off at any time. read your contract documents very closely, and have your lawyer (i assume you've got one) be on top of this also.
Well put george. It basically means you have 5 Years to pay him the money he is loaning you. Yes there might be a penalty if you pay him off early, Other then that you have 5 years to get a loan to pay him back his money or you can lose the house. If there is no penalty you can pay him off as soon as you can get a loan. Or just wait it out and pay the 5 years then pay off the rest in the ballon payment