Posted on: 11th Nov, 2009 12:34 pm
I have been offered a loan modification with a fairly large ballon payment at the end of the 30 year term. I would really like to stay in the home and the new interest rate is good (5.5%) and the new mortgage payment is now affordable BUT what are some of the NOT so obvious pros and cons of an end of term balloon payment?
hi guest,
it will depend upon you whether or not you would be able to pay off the balloon payment at the end of the 30 year term. if you cannot afford to pay it off, you won't be getting the property free and clear and may have to refinance the loan in order to clear it off. as the loan is now affordable for you, i would suggest you to start saving for the balloon payment from now so that it doesn't get difficult for you to pay off the loan.
it will depend upon you whether or not you would be able to pay off the balloon payment at the end of the 30 year term. if you cannot afford to pay it off, you won't be getting the property free and clear and may have to refinance the loan in order to clear it off. as the loan is now affordable for you, i would suggest you to start saving for the balloon payment from now so that it doesn't get difficult for you to pay off the loan.
My mortgage loan was with a bank which was closed by FDIC July 2010, The loan was picked up by another bank but the ballon is due January 2011. I cannot afford to pay the ballon and do not qualify for refinancing. I can afford my monthly payments. I am retired with employer (state gov) and SSA retirement income. What should I do?