![]() Short-term loan - if you are planning to sell the house in a few years, it makes sense to get a short-term loan rather than a 30-year fixed mortgage.Borrowers who expect to increase their income significantly such as a big bonus from work, salary jump, returns from another investment, or receiving an inheritance can take advantage of a balloon mortgage. Buy a house sooner - balloon mortgages give borrowers to buy a house sooner since they will be making much smaller monthly payments before the balloon payment is due.Lower monthly payment - borrowers make a low monthly payment before the balloon payment is due.There are many advantages and disadvantages of a balloon mortgage, following are the pros and cons. Lenders expect the borrowers to repay the loan in the form of a balloon payment after the initial 5 - 10 years.įor example, if a balloon payment is for 5 years, borrowers will make regular monthly payments for 4 years and 11 months, and then pay off the outstanding balance in the last payment. ![]() The balloon mortgage is designed to have lower monthly mortgage payments in exchange for making a big lump sum after certain years. Borrowers are expected to pay off the mortgage after this period.īefore the balloon payment is due, borrowers make regular monthly payments which are relatively small compared to the balloon payment that will be due later.īalloon mortgages are used for both residential and commercial properties and are common for commercial mortgages and business loans.īalloon mortgages are also available for auto loans although less common. Simply enter the mortgage, loan terms, interest rate, and the balloon payment due to get started.Ī balloon mortgage is a short-term mortgage, usually 5 to 10 years, but the payment is amortized based on a 30-year term. ![]() The balloon loan calculator offers a downloadable and printable loan amortization schedule with balloon payment that you can view and download as a PDF file. ![]() Amortization Schedule With Balloon PaymentĪmortization schedule with balloon payment ![]()
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