Balloon Mortgage Calculator: Commercial – Investment Property Calculator, balloon mortgage calculator.#Balloon #mortgage #calculator


Balloon Loan Calculator

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.

Current Mortgage Rates

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

Balloon mortgage calculatorA 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.


10-Year Balloon Investment Property Mortgage, Home and Mortgage Center, balloon mortgage calculator.#Balloon #mortgage #calculator


10-Year Balloon-Investment Property Mortgage

Feel stable and secure in your home and in your payment plan.

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

OUR GREAT RATES

This payment example assumes a loan with points, a loan amount of $ and an estimated property value of . The property is located in Alexandria, VA and is within Fairfax county. The property is an existing single family home and will be used as an investment property. The rate lock period is 60 days and the assumed credit score is .

At a interest rate, the APR for this loan type is and the monthly payment schedule would be:

  • payments of $ at an interest rate of
  • payment of $ at an interest rate of

If an escrow account is required or requested, the actual monthly payment will also include amounts for real estate taxes and homeowner’s insurance premiums.

Features Benefits

  • Predictable payments
  • Free 60 day rate lock
  • For home purchases or refinancing
  • Loan amounts up to $424,100
  • Offer available on investment properties only

This is a 10 year fixed rate mortgage with a balloon payment at maturity. The loan is amortized over 30 years with the balance due and payable in full at the time of maturity. Loan matures in 10 years; you may apply to refinance the balloon payment at maturity.

NOTE: A 1% origination fee applies to this loan.

Funds can only be used to acquire, improve, or maintain rental property where the owner will not occupy for more than 14 days.

Investment Property Mortgages: For loan amounts from $25,000 to $ . Guam, Alaska and Hawaii maximum conforming loan amount $ . The maximum combined loan- to-value (CLTV) is 75% for purchases and limited cash-out loans (where funds will be used to pay off an existing first mortgage loan with little or no cash back) or 70% for cash-out loans (where additional funds will be obtained to acquire, improve, or maintain rental property above any existing mortgage, if applicable)

For purchase applications, please submit a copy of your fully signed ratified purchase agreement to [email protected] in a timely manner to ensure PenFed can meet your closing date.

The applicant is responsible for the following fees and costs at the time of closing: Origination fee, if any, appraisal fee, tax service fee, CLO access fee, title fees, transfer tax fees, credit report fee, flood cert fee, recording fee, survey if required and work verification fee, escrow reserves and interest due until first payment. Other costs may be included due to program specific circumstances. This is not intended to be an all-inclusive list.

Escrows may be waived if LTV is 80% or less in all states.

Additional reserve requirements may apply.

If you withdraw an application that was locked and reapply within 30 days, the new application is subject to worst case pricing.

All above disclosures apply to Non-Veteran’s Administration (VA) loans. VA loans have different guidelines and eligibility requirements.

All rates and offers are in effect as of , offered for a limited time and subject to change without notice. Restrictions apply to existing PenFed mortgage borrowers. Other restrictions may apply. Contact your PenFed mortgage consultant for any applicable additional restrictions and details about your loan. To receive any advertised product you must become a member of PenFed by opening a share (savings) account. Federally insured by the NCUA.

We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

ARM vs Fixed Rate Mortgages: Which One Should You Choose?

Balloon mortgage calculator

With mortgage interest rates at an all-time low you’re probably thinking about finally taking the big leap and becoming a homeowner or refinancing your existing home to a lower interest rate. However, the age-old question looms in front of you…which mortgage should I choose, an ARM or a fixed-rate mortgage?

The answer: it depends on your needs. While there are pros and cons to both mortgages, the real question is not which mortgage is better, but which mortgage will suit my needs.

Let’s take a look at both an ARM and fixed-rate mortgage and then you can decide which option is going to afford you your dream home or that tantalizing interest rate that will have you running to refinance your home.

Adjustable-Rate Mortgages

Adjustable-rate mortgages or ARMs have interest rates that adjust over a period of time. ARMs have had a notoriously bad reputation because of the mortgage meltdown and subsequent recession.

While this reputation was justified in the past, most of those exotic ARMs no longer exist. Today, financial institutions offer hybrid ARMs—like PenFed’s 5/5 ARM, which has a fixed-rate for five years and then the rate adjusts once every five years. This is a unique mortgage product as most ARMs adjust annually after the initial fixed terms.

The thought of an adjustable interest rate probably has you fearing skyrocketing monthly mortgage payments. Fear not, all ARMs have caps—a limit on the amount the interest rate can adjust—and ceilings—the highest the interest rate is allowed to become during the life of the loan. Using PenFed’s 5/5 ARM as an example, the initial interest rate will change every five years by no more than two percentage points up or down (the cap). This rate will never exceed five percentage points above the initial rate (the ceiling).

Fixed-Rate Mortgages

A fixed-rate mortgage provides a reliable and fixed monthly payment for the life of the loan. Because your total mortgage payment remains stable from month to month, homeowners can easily budget their monthly expenses.

Financial institutions offer various fixed-rate mortgages including the more common fixed-rate mortgages: 15, 20, and 30-year. Out of the three the 30-year fixed is the most popular mortgage because it usually offers the lowest monthly payment. However, the lower monthly payment comes at a cost of paying more in interest over the life of the loan.

Some Considerations

So, now that you know a little more about ARMs and fixed-rate mortgages here are a few things you should consider when making a decision about which mortgage will best suit your needs:

  • How long do you plan to stay in your home? If you don’t plan to stay in your home for the long haul, you may want to consider an ARM, which has a lower interest rate than the 30-year fixed and you save big money in interest charges. If you move or refinance within five years before the interest rate adjusts you can avoid a payment hike. Conversely, if you’ve found or are already in the home of your dreams, a fixed-rate mortgage makes more sense and will provide you stable payments for years to come.
  • What can you afford? Knowing how much you can afford to pay month to month in mortgage payments will also help you decide between an ARM or fixed-rate mortgage. If you’re working within a tight budget, the ARM may be a more attractive option since the payments will be lower than a 30-year fixed. But, unless you anticipate a raise or another source of added income, ask yourself if you’ll be able to afford your mortgage payment when the ARM’s interest rate increases. If not, don’t take the risk. Go with the fixed-rate mortgage and get stable monthly payments.

The Takeaway: When it’s all said and done, the goal is to get you into the home of your dreams or refinance your existing home without breaking your pockets. Both the ARM and fixed-rate mortgage are products that will help you reach your goal. However, the path you take to get to your goal depends on which mortgage will suit your needs.

Balloon mortgage calculator

The credit union is federally insured by the National Credit Union Association.


Amortization Calculator, balloon mortgage calculator.#Balloon #mortgage #calculator


Amortization Calculator

Balloon mortgage calculator

Monthly Pay: $1,687.71

While our Amortization Calculator can serve as a basic tool for all amortized items, we have specific calculators for common situations. For these specific purposes, it is probably better to use them instead.

What is Amortization?

Webster’s dictionary defines amortization as “the systematic repayment of a debt.” There are two general uses to amortization: paying off a loan over time, or spreading the cost of an expensive and long-life item over many periods.

Paying Off a Loan Over Time

When a borrower takes out a mortgage, car loan, or personal loan, they usually make monthly payments to the lender; these are some of the most common uses of amortization. A part of the payment covers the interest due on the loan, and the remainder of the payment goes toward reducing the principal amount owed. Interest is computed on the current amount owed and thus will become progressively smaller as the principal is decreased. During the earlier stages of an amortization process, larger portions of the payments made are for interest. As time goes on, the principal portion will gradually increase until the principal becomes zero. It is possible to see this course of action at work on the amortization table.

Credit cards, on the other hand, are generally not amortized. They are called revolving debt instead, where the outstanding balances can be carried month-to-month, and the amount repaid each month can be varied. Please use our Credit Card Calculator for more information, or our Credit Cards Payoff Calculator to schedule a financially feasible way to pay off multiple credit cards. Examples of other loans that aren’t amortized include interest-only loans and balloon loans. The former includes an interest-only period of payment and the latter has a large principal payment at loan maturity, both unrelated to traditionally-structured amortization schedules.

Spreading Costs

Businesses like to purchase expensive items that are used for long periods of time that are classified as investments. Commonly amortized items for the purpose of spreading costs include machinery, buildings, and equipment. From an accounting perspective, a sudden purchase of expensive factory during a quarterly period can skew the financials, so its value is amortized over the expected life of the factory instead. Although it can technically be considered amortizing, this is usually referred to as the depreciation expense of an asset amortized over its expected lifetime. Use our Depreciation Calculator to depreciate items according to conventional accounting standards.

Amortization as a way of spreading business costs generally refer to intangible assets like a patent or copyright. Under Section 197 of U.S. law, the value of these assets can be deducted month-to-month or year-to-year. Just like with any other amortization, payment schedules can be forecasted by a calculated amortization schedule. The following are intangible assets that are often amortized:

  1. Goodwill, which is the reputation of a business regarded as a quantifiable asset
  2. Going-concern value, which is the value of a business as an ongoing entity
  3. Workforce in place (current employees, including their experience, education, and training)
  4. Business books and records, operating systems, or any other information base, including lists or other information concerning current or prospective customers
  5. Patents, copyrights, formulas, processes, designs, patterns, know-hows, formats, or similar items
  6. Customer-based intangibles including customer bases and relationships with customers
  7. Supplier-based intangibles including the value of future purchases due to existing relationships with vendors
  8. Licenses, permits, or other rights granted by governmental units or agencies (including issuances and renewals)
  9. Covenants not to compete or non-compete agreements entered relating to acquisitions of interests in trades or businesses
  10. Franchises, trademarks, or trade names
  11. Contracts for the use of, or term interests in any items on this list

Some intangible assets, with goodwill being the most common example, that have indefinite useful lives or are “self-created” may not be legally amortized for tax purposes.

According to the IRS under Section 197, some assets are not considered intangibles including interest in businesses, contracts, or land, most computer software, intangible assets not acquired in connection with the acquiring of a business or trade, interest in existing lease or sublease of tangible property or existing debt, rights to service residential mortgages (unless it was acquired in connection with the acquisition of a trade or business), or certain transaction costs incurred by parties to a corporate organization in which any part of a gain or loss is not recognized.

Business Tax Purposes

In the U.S., amortization is a legal expense of doing business and can be utilized to reduce an organization’s taxable income, which many companies take advantage of. Depreciation, which can be defined as the amortization of tangible assets, is found on most companies’ income statements as an expense that is generally tax deductible. Depending on each company and what their business entails, tangible assets depreciated can be factory machinery, trucks, and various equipment. Intangible assets can be any of the examples listed above excluding the exceptions right underneath. All amortizable assets are disclosed on Form 4562 provided through the IRS where new assets are listed first, and then subsequent assets that are in the midst of an amortization schedule from previous years. The calculated results are then transferred to the relevant tax return forms, depending on type of business such as sole proprietorship or corporation.

Amortizing Startup Costs

An exception to amortization in business tax are business startup costs, which are defined as costs incurred to investigate the potential of creating or acquiring an active business and to create an active business. They must be the expenses deducted as business expenses if incurred by an existing active business, and must be incurred before the active business begins. Examples of these so-called costs include consulting fees, financial analysis of potential acquisitions, advertising expenditures, and payments to employees, which all must incur before the business is deemed active. According to IRS guidelines, initial startup costs must be amortized, and $5,000 can be deducted during the first tax year of the business.


Balloon Mortgage Calculator: Commercial – Investment Property Calculator, balloon mortgage calculator.#Balloon #mortgage #calculator


Balloon Loan Calculator

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.

Current Mortgage Rates

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

Balloon mortgage calculatorA 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.


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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    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.

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