Balloon Loan Calculator #mortgage #net #branch


#balloon mortgage calculator

#

Balloon Payment Calculator
With Payment Schedule

For that feature, please use the Time Value of Money Calculator. This calculator will support balloon loans and you ll be able to set origination date, payment dates and balloon date to any date desired.

If you click on above link, scroll down the page and please see tutorial nos. 7 and 8:

Balloon Payment Calculation
Calculate the balloon amount

Balloon Loan Calculation
Calculate the periodic payment required to result in a specified balloon

If you try this calculator, I would be very interested to know how you make out.

#2 there is already a calculator on this site that will allow you to have a balloon payment and set the 1st payment date (or any payment date for that matter). Please see:

This calculator is our most flexible calculator. However, it may take some getting use to. To that end, there are 25 tutorials listed at the bottom of the page. Please see #7 and #8. (Note, the tutorials still have not been updated to reflect the new look, but the basic functionality between the old calculator and new one is the same. Ask question on that page if something isn t clear.)

#1. This is where I get a chance to sell you something. The C-Value! program will create a schedule and export to Excel. If you are using Windows you may want to consider using it. It costs $19.95. (Works in a very similar way to the above calculator.)

Thanks for the comment.

Not with this particular calculator. However, the Time Value of Money calculator will let you set dates (even setting the date individually for all payments should that ever be needed).

Depending on whether the regular payment is unknown or the balloon payment about is unknown, scroll down the page and see the tutorial #7 or #8 for examples.

If you have any question about its use, you can ask them on that page.

(Some calculators on this site do not offer date options so that they are smaller and work better on smaller devices. Additionally, for some requirements, setting dates is an unnecessary hindrance.)

I need to run several payment schedules with fixed payment amounts but I also need to choose the loan date (05/01/16). It seems all your calculators assume a loan date of the first of next month (04/01/16). Can you recommend another calculator?

Thanks for asking. I see you found it, but for the benefit of others, the amortization schedule allows the user to select a loan date and first payment date.

I ll also point out that since you were looking at the balloon payment calculator, the the amortization schedule won t support balloon loans. However this calculator, Time Value of Money will allow you to set the loan date and have a final balloon payment. (Note, the tutorial listed at the bottom of the page, still need to be updated. Hopefully they will be completed within the next two weeks.)

Gary Spray says:

How can I change the first payment date. The autocalc started in 6/1/2016 with first pymt due 7/1/2016. I need it to start with 1st pymt 6/1/2016.

Thank you for any info and assist.

This calculator is designed for rapid entry and therefore it is not possible to specify dates.

But, I do have a calculator that will handle balloons and give you full control over the dates. Please use the Time Value of Money calculator.

And see these tutorials:

Please let me know how you make out. If the TVM calculator doesn t meet your needs, tell me why, because I have one more idea as well.

Can you please add smart phone support? Tried on both a window phone and android but was able to edit any numerical fields. Only the drop down fields.

I ve got to try to get a hold of an Android device to try this. As far as I know, the site should work well with any modern device handheld, tablet or desktop. I ve personally tested with iPhone, iPad and all popular desktop browsers.

With Android, does it have next/previous buttons? Or tab/shift tab? If so, please try this. Rather than touch the screen and try to edit, use the keys to go to the next input and then try to type. My hunch, that will work.

In general, for edit to work, the number has to be selected OR type the backspace key to clear first.

Please let me know of any of these things help.

Comments, suggestions questions welcomed. Cancel reply


How A Balloon Mortgage and Payment Works #mortgage #rate


#balloon mortgage calculator

#

How A Balloon Mortgage and Payment Works

A balloon mortgage is a short term, non-amortizing loan available to real estate purchasers. These mortgages typically have lower monthly payments and interest rates and can be easier to qualify for than a traditional 30 year fixed loan plan. Unlike many other mortgages, balloon mortgages do not pay themselves off at the end of the loan term. At the end of the term, a portion of the principal remains and must be paid off in one lump-sum payment, known as the balloon payment . Balloon mortgages are usually fixed-rate mortgages, but the monthly payments borrowers make most likely include only the interest. Though the payments are usually based on a 30-year amortization schedule, and terms for balloon loans can range anywhere from 1 to 25 years, the balance will usually come due after a short time period three to five years.

For example, if a buyer obtains a seven-year balloon mortgage to purchase a home, he has seven years of equal monthly payments at a fixed interest rate. This rate is often lower than what the buyer would otherwise be able to secure under a traditional mortgage loan. At the end of the seven years, the balloon payment of the remainder of the balance of the loan is due, and the borrower must either pay it in full, refinance with the same or a different lender, or sell the home.

What are the advantages to using a balloon mortgage? Most borrowers use the balloon mortgage when they intend to sell the home before the balloon payment is due. For example, homebuyers who know that their employer will relocate them to another city or state within a few years often opt for a balloon mortgage. Some individuals use allotted years of lower payments to better invest and leverage their money. At the end of seven years, some homeowners can pay off the balance in full. Most, however, are not able to afford this payment and will choose to refinance with the existing lender or a new lender at that point in time. Refinancing is the simplest way of renewing the mortgage. The rates charged when renewing with the same lender may exceed those available from a new lender. Moreover, balloon loans generally offer the borrower a non-negotiable predetermined refinance option in case they have difficulty paying the balloon payment. Refinancing with another lender gives the borrower the chance to negotiate a new loan with a better interest rate and more appealing repayment options.

What are the disadvantages. There are several risks associated with balloon mortgages. At the conclusion of your loan term, you will have to pay off your outstanding balance, or the principal, according to your own arrangements. Borrowers who are unable to make the final payment may have to refinance, sell their home, or convert the balloon mortgage to a traditional mortgage at current interest rates. Also, since a balloon mortgage does very little to pay down a borrower s principal, it is not an effective way to build equity in one s home.

Answered almost 10 years ago

The option of making early repayment only lies with the balloon mortgages or else it can be extended up to a 30 year mortgage with fixed rate along the option to be embedded. If the total debt repayment would be compared according to conventional fixed rate mortgage, these balloon mortgages are quite lower. They can be termed to be the form of partially amortized mortgage or interest only loans.

updated almost 3 years ago

Answered about 3 years ago

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Balloon Loan Payment Calculator with Amortization Schedule #mortgage #options


#balloon mortgage calculator

#

Balloon Loan Payment Calculator
with Amortization Schedule

[ Skip to Calculator ]

The Balloon Loan Payment Calculator on this page will instantly calculate the monthly payment, interest costs and the payment due at the end of the loan.

This free online calculator will calculate the monthly payments, interest cost, and balloon payment for any combination of balloon loan terms.

Plus, the calculator also includes an option for including a monthly prepayment amount, as well as an option for displaying an amortization schedule with the results.

Updated September 15, 2012: Added annual totals to the amortization schedule and a feature for opening the amortization schedule in a printer friendly window.

What is a Balloon Payment?

A balloon payment is the amount due after a balloon loan’s specified number of years have passed.

A balloon loan is usually stated in a “pre-balloon-years/payment-based-on-years” format. For example, if a balloon loan’s payment is based on a 30-year payback period, and the balance is due after 3 years, that would be considered a “3/30” balloon loan.

Why a Balloon Loan?

The primary reasons you might consider choosing a balloon loan over a conventional loan, are because balloon loans tend to be easier to qualify for and they typically come with lower interest rates.

The downside is that you risk being forced into a higher interest rate loan if you can’t pay the balance when it comes due.

With that, let’s use the balloon loan payment calculator to calculate the payments, interest cost and balance due for your loan.

Loan amount: The dollar amount of the loan, otherwise referred to as the Principal.

Annual interest rate: The annual interest rate you will be charged during the pre-balloon period. Enter as a percentage (for .06, enter 6%).

Number of years payment is based on: The number of years the payment will be based on (typically 30 years).

Term of balloon period in years/months: The number of years or months between now and when the balance will come due (normally from 1 to 10 years).

Optional monthly prepayment: If you would like to apply an additional monthly amount to paying down the principal during the pre-balloon period, enter the monthly amount here.

Month and year to start payments: The month and year you want your payments to start. The calculator will use the month and year to create an amortization schedule should you choose to have one included in the results.

Monthly loan payment amount: Based on your entries, this is how much your minimum monthly payment will be for the years prior to the balance coming due.

Monthly payment with prepayment: The total of your minimum monthly payment, plus the monthly prepayment amount (if you chose to enter one). If no monthly prepayment amount was entered, this field will be the same as the preceding field.

Total payments: The total of all monthly payments between now and when your balance comes due.

Interest paid: The interest you will pay between now and when your balance comes due.

Principal paid: The principal you will have paid down by the time your balance comes due.

Balloon payment amount: The principal balance of your loan when your balance comes due.

Printer Friendly Amortization Schedule with Balloon Payment button: If you selected Include Amortization Schedule before calculating, this button will be activated. Once activated, clicking the button will open a pop-up window containing a printer friendly copy of the amortization schedule displayed in the results.

Other useful free online financial calculators:


    Free Balloon Loan Calculator for Excel #huntington #mortgage


    #balloon mortgage calculator

    #

    Balloon Loan Calculator

    Description

    Calculate the monthly payments. total interest. and the amount of the balloon payment for a simple loan using this Excel spreadsheet template.

    The spreadsheet includes an amortization and payment schedule suitable for car loans, business loans, and mortgage loans.

    Update 11/12/2015: The main download and the Google version now have you enter the total number of payments rather than the number of regular payments. The balloon payment is simply the final payment required to fully pay off the loan. This is a minor change but makes the calculator a bit easier to use. (You can still download the older .xls version)

    Using the Balloon Mortgage Calculator

    Why a Balloon Payment?

    I originally created this spreadsheet to figure out a payment schedule for a car loan or auto loan. Why? Mainly because I didn’t have the cash in hand to pay for the car in one lump sum, but I knew that I would after 6 months (because after 10 years of being a student, I was finally going to have a job). So, to keep the monthly payments low at first. we set up a 3-year loan with the plan to pay the loan off completely after about 6 months.

    Rounding

    The latest versions of the balloon loan calculator (v1.3+) take into account the fact that the regular payment and the interest are rounded to the nearest cent. The Balloon Payment with Rounding value is taken directly from the amortization schedule, which ensures that the final balance is zero.

    Using the Balloon Payment Calculator for Mortgages

    This spreadsheet can be useful as a mortgage calculator. particularly for calculating the balloon payment that is made when you sell your house after a number of years. However, there are many other costs associated with home buying/selling that the calculator does not take into account, such as property taxes, escrow payments, mortgage insurance, homeowner’s insurance, closing costs, etc.

    Interest-Only Mortgage Loans

    An option has been added to the spreadsheet to choose between monthly payments that are amortized vs. payments that are interest-only. Warning! While interest-only loans may look appealing due to the low monthly payment, you still have to pay off the loan eventually. Beware of the consumer debt spiral!

    More Loan Calculators

    Related Content

    References

    • Balloon Loan Definition , From www.investorwords.com. Mar 24, 2005.
    • Amortization Calculator. by Bret Whissel. An excellent web-based calculator with amortization schedule.

    Disclaimer. The spreadsheet and the info on this page is meant for educational purposes only. We believe the calculations to be correct, but do not guarantee the results. Please consult your financial advisor or lending institution before making any final financial decisions.

    LIKE THIS CALCULATOR?


    How A Balloon Mortgage and Payment Works #mortgage #jobs


    #balloon mortgage calculator

    #

    How A Balloon Mortgage and Payment Works

    A balloon mortgage is a short term, non-amortizing loan available to real estate purchasers. These mortgages typically have lower monthly payments and interest rates and can be easier to qualify for than a traditional 30 year fixed loan plan. Unlike many other mortgages, balloon mortgages do not pay themselves off at the end of the loan term. At the end of the term, a portion of the principal remains and must be paid off in one lump-sum payment, known as the balloon payment . Balloon mortgages are usually fixed-rate mortgages, but the monthly payments borrowers make most likely include only the interest. Though the payments are usually based on a 30-year amortization schedule, and terms for balloon loans can range anywhere from 1 to 25 years, the balance will usually come due after a short time period three to five years.

    For example, if a buyer obtains a seven-year balloon mortgage to purchase a home, he has seven years of equal monthly payments at a fixed interest rate. This rate is often lower than what the buyer would otherwise be able to secure under a traditional mortgage loan. At the end of the seven years, the balloon payment of the remainder of the balance of the loan is due, and the borrower must either pay it in full, refinance with the same or a different lender, or sell the home.

    What are the advantages to using a balloon mortgage? Most borrowers use the balloon mortgage when they intend to sell the home before the balloon payment is due. For example, homebuyers who know that their employer will relocate them to another city or state within a few years often opt for a balloon mortgage. Some individuals use allotted years of lower payments to better invest and leverage their money. At the end of seven years, some homeowners can pay off the balance in full. Most, however, are not able to afford this payment and will choose to refinance with the existing lender or a new lender at that point in time. Refinancing is the simplest way of renewing the mortgage. The rates charged when renewing with the same lender may exceed those available from a new lender. Moreover, balloon loans generally offer the borrower a non-negotiable predetermined refinance option in case they have difficulty paying the balloon payment. Refinancing with another lender gives the borrower the chance to negotiate a new loan with a better interest rate and more appealing repayment options.

    What are the disadvantages. There are several risks associated with balloon mortgages. At the conclusion of your loan term, you will have to pay off your outstanding balance, or the principal, according to your own arrangements. Borrowers who are unable to make the final payment may have to refinance, sell their home, or convert the balloon mortgage to a traditional mortgage at current interest rates. Also, since a balloon mortgage does very little to pay down a borrower s principal, it is not an effective way to build equity in one s home.

    Answered almost 10 years ago

    The option of making early repayment only lies with the balloon mortgages or else it can be extended up to a 30 year mortgage with fixed rate along the option to be embedded. If the total debt repayment would be compared according to conventional fixed rate mortgage, these balloon mortgages are quite lower. They can be termed to be the form of partially amortized mortgage or interest only loans.

    updated almost 3 years ago

    Answered about 3 years ago

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    Compare rates in your area:

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    Balloon Payment Loan Calculator #mortgage #rates #canada


    #bankrate loan calculator

    #

    Sorry, this is kind of a goofy one! I’m not sure how I can explain it to make it understandable.

    You can solve for either the Monthly Payment and Balloon Payment or the Balloon Payment Only .

    When you solve for the Monthly Balloon payments, fill in the first THREE fields ONLY and then press the Monthly & Balloon button. The payment is based on a 30 year loan.

    When you solve for the Balloon Only payment, fill in the first FOUR fields and then press the Balloon Only button. You can make the payment be whatever you want. Therefore, it acts like a Loan PAYOFF Calculator .

    Study the examples below. I think they will provide clarification.

    EXAMPLES:

    1. You are getting a $150,000 mortgage loan with a 3 year fixed interest rate of 4.5%. After that the rate can change. You want to know what your monthly payment will be for the first 3 years and how much you’ll still owe.
      Enter:
    • 150,000 for Loan Amount
    • 35 for Months
    • 4.5 for Interest Rate
    • Press the Monthly Balloon button and you will see that your payment would be $760.03 and that you’ll still owe $143,161.83 on the loan.

  • Using the example above, let’s say you want to make an extra principal payment each month. Instead of paying $760.03 per month, you’re going to pay $1000 per month. Now how much will you owe after 35 months of payments?
    Enter:
    • Leave everything the same, just change the Payment to 1000
    • Press the Balloon Only button and you will see that you’ll owe $134,171.07 on the loan, instead of $143,161.83.

  • A friend gave you a $10,000 loan at 5% interest. It is expected to be paid back within 5 years. You have been making monthly payments of $200.00 (instead of the $188.71 calculated payment ) for 17 months. Now you have a little extra money and would like to pay your friend back the entire amount owed.
    Enter:
    • 10,000 for Loan Amount
    • 17 for Months
    • 5 for Interest Rate
    • 200 for Payment
    • Press the Balloon Only button and you will see that you can pay your friend back with $7,246.79.

    I welcome your links to MyCalculators.com

    To link to THIS page, please copy the following HTML and paste it into your page.

    a href=”http://www.mycalculators.com/ca/loancalculatorballoonm.html” target=”_top”>Balloon Payment Loan Calculator |- MyCalculators.com /a


  • Balloon Mortgage Calculator: Commercial – Investment Property Calculator #mortgage #approval #calculator


    #balloon mortgage calculator

    #

    Balloon Loan Calculator

    Calculate Your Business Loan’s Monthly Payment Schedule

    This tool figures a loan’s monthly and balloon payments, based on the amount borrowed, the loan term and the annual interest rate. Then, once you have calculated the monthly payment, click on the “Create Amortization Schedule” button to create a report you can print out.

    Everything You Need to Know About Balloon Mortgages

    A Balloon mortgage is a loan that doesn’t wholly amortize over the life of the home loan, resulting in a balance at the conclusion of the term. Consequently, the final payment is substantially higher than the regular payments. Obviously, the majority of homeowners who choose this type of financing plan on either refinancing prior to the term ending, or selling the property. A balloon mortgage requires monthly payments for a period of 5 or 7 years, followed by the remainder of the balance (the balloon payment). The monthly payments for the time period prior to the balloon’s due date are generally calculated according to a 30 year amortization schedule.

    Why a Balloon Loan?

    A balloon mortgage is often chosen by individuals who want to have low, fixed monthly payments, with the end goal being to sell the property (often investment properties), at a profit prior to the balloon payment coming due.

    What Are 15 Year Balloons Used For?

    A 15 year balloon is a form of home loan in which the homeowner makes principal and interest payments for 15 years. Subsequently, at the conclusion of the 15 year term, they are required to pay the amount of money still owed. The 15 year has also become a preferred loan choice for a second mortgage in a piggyback agreement. It’s becoming more and more common for borrowers that put less than 20% down to opt for piggyback options instead of purchasing mortgage insurance. A piggyback can be a first mortgage for 80% of the home’s value and a second mortgage for 5% to 20% of value, depending upon how much the borrower puts down as a payment. In some cases the second mortgage is an adjustable rate; however an increasingly common option is the 15 year balloon.

    Paying Off Your Loan Early Vs. Conserving the Money

    Property owners who have the available resources to make a partial or full early payment on their balloon amount have the advantage of selecting from a number of different options. Your best option is dependent on your financial goals and any other investment or savings options you have. One of the main variables that determine whether it’s a better idea to pay off the balloon ahead of time is the interest rate on the loan in comparison to the interest that could be earned from investing the money elsewhere until the balloon is due. If the loan carries a higher interest rate, you would save money by paying the balloon off early. It’s important to keep in mind that an early balloon payoff requires that you pay not only the balloon amount, but any principal reduction that would be included in the regular monthly payments that are yet to be paid. One last consideration with investing or paying down your loan would be the tax implications. People in a higher tax bracket have to earn a significantly larger rate of return in the market for the after-tax returns to match the yield on paying off their debt early .

    Refinancing a Balloon Mortgage When You’re Underwater

    A mortgage debtor with a balloon balance higher than the property value faces challenging problems. Since no other lender will refinance an underwater home, either their current lender will need to refinance it or the homeowner will be pushed to default. In some cases an offer might be presented by the lender to extend the term of the loan for an additional 5 years at the same rate.

    If you’re underwater, keep in mind that your current lender is aware that you don’t have any other option but to default, a fact that would inflict a substantial loss on the lender. A considerably better result from their standpoint would be to refinance which would keep your payments coming in and give you an opportunity to pay off your mortgage. In some cases the lender may be willing to modify the terms of your loan as well, relieving your payment problems. Basically, whatever deal emerges, you’ll be able to negotiate and if your lender understands that you see your choices as either defaulting on your mortgage or refinancing at terms you can handle, they’ll more than likely be reasonable.

    Advantages Disadvantages

    Advantages

    If you’re wondering why a homeowner would decide on a balloon mortgage instead of a fixed or adjustable-rate mortgage. the answer is that balloon mortgage rates come at a discounted APR, making them a more affordable alternative early in the term. An example would be that if you don’t plan on keeping the property (or loan) for more than a few years, a balloon would be a viable option. That being said, there are always associated risks.

    Disadvantages

    The obvious negative aspect is the uncertainty at the conclusion of the loan term. For instance, after 7 years, the existing balance is owed. Just imagine if your property drops in value, leaving you owing more than the remaining balloon payment – you’d have a big problem on your hands if you can’t refinance or execute a short sale. This wouldn’t be the case if you had an ARM or fixed rate loan. ARMs may adjust higher, established by their caps which limit the amount the payments can rise, providing a certain level of protection. Even if you’re underwater on your loan, thanks to the caps, your payments will probably be manageable. Fixed rate home loans have the same payment throughout the life of the loan.

    What is a Negative Amortization Balloon Mortgage?

    Negative amortization develops when the monthly payment is less than the interest due which causes the loan balance to increase instead of decreasing. ARMs that permit negative amortization could increase the affordability of the home as well as provide lower interest rates, if the interest rates don’t rise consistently. As with just about everything else regarding finance, the benefits come with risks.

    In conclusion

    The most important thing you should do before you decide on a home loan is to evaluate all of your options and consult with a trusted mortgage broker/lender. You just might be surprised to find that today’s fixed rate loan rates may be better than a ARM or balloon mortgage and without as much risks.

    2007 – 2016 www.MortgageCalculator.org | Contact Us


    Balloon Loan Payment Calculator with Amortization Schedule #mortgage #calculator #excel


    #balloon mortgage calculator

    #

    Balloon Loan Payment Calculator
    with Amortization Schedule

    [ Skip to Calculator ]

    The Balloon Loan Payment Calculator on this page will instantly calculate the monthly payment, interest costs and the payment due at the end of the loan.

    This free online calculator will calculate the monthly payments, interest cost, and balloon payment for any combination of balloon loan terms.

    Plus, the calculator also includes an option for including a monthly prepayment amount, as well as an option for displaying an amortization schedule with the results.

    Updated September 15, 2012: Added annual totals to the amortization schedule and a feature for opening the amortization schedule in a printer friendly window.

    What is a Balloon Payment?

    A balloon payment is the amount due after a balloon loan’s specified number of years have passed.

    A balloon loan is usually stated in a “pre-balloon-years/payment-based-on-years” format. For example, if a balloon loan’s payment is based on a 30-year payback period, and the balance is due after 3 years, that would be considered a “3/30” balloon loan.

    Why a Balloon Loan?

    The primary reasons you might consider choosing a balloon loan over a conventional loan, are because balloon loans tend to be easier to qualify for and they typically come with lower interest rates.

    The downside is that you risk being forced into a higher interest rate loan if you can’t pay the balance when it comes due.

    With that, let’s use the balloon loan payment calculator to calculate the payments, interest cost and balance due for your loan.

    Loan amount: The dollar amount of the loan, otherwise referred to as the Principal.

    Annual interest rate: The annual interest rate you will be charged during the pre-balloon period. Enter as a percentage (for .06, enter 6%).

    Number of years payment is based on: The number of years the payment will be based on (typically 30 years).

    Term of balloon period in years/months: The number of years or months between now and when the balance will come due (normally from 1 to 10 years).

    Optional monthly prepayment: If you would like to apply an additional monthly amount to paying down the principal during the pre-balloon period, enter the monthly amount here.

    Month and year to start payments: The month and year you want your payments to start. The calculator will use the month and year to create an amortization schedule should you choose to have one included in the results.

    Monthly loan payment amount: Based on your entries, this is how much your minimum monthly payment will be for the years prior to the balance coming due.

    Monthly payment with prepayment: The total of your minimum monthly payment, plus the monthly prepayment amount (if you chose to enter one). If no monthly prepayment amount was entered, this field will be the same as the preceding field.

    Total payments: The total of all monthly payments between now and when your balance comes due.

    Interest paid: The interest you will pay between now and when your balance comes due.

    Principal paid: The principal you will have paid down by the time your balance comes due.

    Balloon payment amount: The principal balance of your loan when your balance comes due.

    Printer Friendly Amortization Schedule with Balloon Payment button: If you selected Include Amortization Schedule before calculating, this button will be activated. Once activated, clicking the button will open a pop-up window containing a printer friendly copy of the amortization schedule displayed in the results.

    Other useful free online financial calculators:


      How A Balloon Mortgage and Payment Works #fha #mortgage #calculator


      #balloon mortgage calculator

      #

      How A Balloon Mortgage and Payment Works

      A balloon mortgage is a short term, non-amortizing loan available to real estate purchasers. These mortgages typically have lower monthly payments and interest rates and can be easier to qualify for than a traditional 30 year fixed loan plan. Unlike many other mortgages, balloon mortgages do not pay themselves off at the end of the loan term. At the end of the term, a portion of the principal remains and must be paid off in one lump-sum payment, known as the balloon payment . Balloon mortgages are usually fixed-rate mortgages, but the monthly payments borrowers make most likely include only the interest. Though the payments are usually based on a 30-year amortization schedule, and terms for balloon loans can range anywhere from 1 to 25 years, the balance will usually come due after a short time period three to five years.

      For example, if a buyer obtains a seven-year balloon mortgage to purchase a home, he has seven years of equal monthly payments at a fixed interest rate. This rate is often lower than what the buyer would otherwise be able to secure under a traditional mortgage loan. At the end of the seven years, the balloon payment of the remainder of the balance of the loan is due, and the borrower must either pay it in full, refinance with the same or a different lender, or sell the home.

      What are the advantages to using a balloon mortgage? Most borrowers use the balloon mortgage when they intend to sell the home before the balloon payment is due. For example, homebuyers who know that their employer will relocate them to another city or state within a few years often opt for a balloon mortgage. Some individuals use allotted years of lower payments to better invest and leverage their money. At the end of seven years, some homeowners can pay off the balance in full. Most, however, are not able to afford this payment and will choose to refinance with the existing lender or a new lender at that point in time. Refinancing is the simplest way of renewing the mortgage. The rates charged when renewing with the same lender may exceed those available from a new lender. Moreover, balloon loans generally offer the borrower a non-negotiable predetermined refinance option in case they have difficulty paying the balloon payment. Refinancing with another lender gives the borrower the chance to negotiate a new loan with a better interest rate and more appealing repayment options.

      What are the disadvantages. There are several risks associated with balloon mortgages. At the conclusion of your loan term, you will have to pay off your outstanding balance, or the principal, according to your own arrangements. Borrowers who are unable to make the final payment may have to refinance, sell their home, or convert the balloon mortgage to a traditional mortgage at current interest rates. Also, since a balloon mortgage does very little to pay down a borrower s principal, it is not an effective way to build equity in one s home.

      Answered almost 10 years ago

      The option of making early repayment only lies with the balloon mortgages or else it can be extended up to a 30 year mortgage with fixed rate along the option to be embedded. If the total debt repayment would be compared according to conventional fixed rate mortgage, these balloon mortgages are quite lower. They can be termed to be the form of partially amortized mortgage or interest only loans.

      updated almost 3 years ago

      Answered about 3 years ago

      You Must Be Logged In To Answer

      Product: Today Last Week

      Compare rates in your area:

      Product: Today Last Week

      Compare rates in your area:

      About

      The MND Q

      Highlights

      – 10,000+ new unique visitors daily
      – 60,000+ industry professionals
      – 2000+ questions answered

      Share this question on


      Balloon Loan Payment Calculator with Amortization Schedule #home #mortgage #loan #rates


      #balloon mortgage calculator

      #

      Balloon Loan Payment Calculator
      with Amortization Schedule

      [ Skip to Calculator ]

      The Balloon Loan Payment Calculator on this page will instantly calculate the monthly payment, interest costs and the payment due at the end of the loan.

      This free online calculator will calculate the monthly payments, interest cost, and balloon payment for any combination of balloon loan terms.

      Plus, the calculator also includes an option for including a monthly prepayment amount, as well as an option for displaying an amortization schedule with the results.

      Updated September 15, 2012: Added annual totals to the amortization schedule and a feature for opening the amortization schedule in a printer friendly window.

      What is a Balloon Payment?

      A balloon payment is the amount due after a balloon loan’s specified number of years have passed.

      A balloon loan is usually stated in a “pre-balloon-years/payment-based-on-years” format. For example, if a balloon loan’s payment is based on a 30-year payback period, and the balance is due after 3 years, that would be considered a “3/30” balloon loan.

      Why a Balloon Loan?

      The primary reasons you might consider choosing a balloon loan over a conventional loan, are because balloon loans tend to be easier to qualify for and they typically come with lower interest rates.

      The downside is that you risk being forced into a higher interest rate loan if you can’t pay the balance when it comes due.

      With that, let’s use the balloon loan payment calculator to calculate the payments, interest cost and balance due for your loan.

      Loan amount: The dollar amount of the loan, otherwise referred to as the Principal.

      Annual interest rate: The annual interest rate you will be charged during the pre-balloon period. Enter as a percentage (for .06, enter 6%).

      Number of years payment is based on: The number of years the payment will be based on (typically 30 years).

      Term of balloon period in years/months: The number of years or months between now and when the balance will come due (normally from 1 to 10 years).

      Optional monthly prepayment: If you would like to apply an additional monthly amount to paying down the principal during the pre-balloon period, enter the monthly amount here.

      Month and year to start payments: The month and year you want your payments to start. The calculator will use the month and year to create an amortization schedule should you choose to have one included in the results.

      Monthly loan payment amount: Based on your entries, this is how much your minimum monthly payment will be for the years prior to the balance coming due.

      Monthly payment with prepayment: The total of your minimum monthly payment, plus the monthly prepayment amount (if you chose to enter one). If no monthly prepayment amount was entered, this field will be the same as the preceding field.

      Total payments: The total of all monthly payments between now and when your balance comes due.

      Interest paid: The interest you will pay between now and when your balance comes due.

      Principal paid: The principal you will have paid down by the time your balance comes due.

      Balloon payment amount: The principal balance of your loan when your balance comes due.

      Printer Friendly Amortization Schedule with Balloon Payment button: If you selected Include Amortization Schedule before calculating, this button will be activated. Once activated, clicking the button will open a pop-up window containing a printer friendly copy of the amortization schedule displayed in the results.

      Other useful free online financial calculators: