The need for Balloon Payment Assistance is common but still a problem with mortgage loans as not many know how to deal with an unaffordable Balloon Payment, leaving countless homeowners at risk of foreclosure due to the inability to afford the Balloon Payment when its due.
What is a Balloon Payment ?
A Balloon Payment is the repayment of the outstanding principal balance made at the end of the loan term. A balloon payment is a one time larger-than-usual mortgage payment , the balloon payment is the sum of loan balance not paid off during regular loan term.
What Causes a Balloon Payment ?
There are many reasons why a loan could have a Balloon payment. A Balloon payment is a way to lower the monthly mortgage/loan payment by not fully amortizing the loan, allowing the payment to be lower than normal because the payments are not broken down in a way to fully pay the loan off in full by end of the term. Loans can be generated with a Balloon payment but in most cases a Balloon payment is created through a re-structuring of the loan terms ( In other words a Loan Modification ). By extending the amortization period beyond the loan period a borrower is allowed to pay a lower payment that will not pay the loan off in full by the last payment of the loan per the loan term.If you have a mortgage with a balloon payment, your payments may be lower in the years before the balloon payment comes due, but you could owe a big amount at the end of the loan.
In many cases borrowers do not make it to the end of the loan term/life, statistically a majority of borrowers either sell or refinance before ever making it to the end of the loan term.
What is Balloon Payment Assistance ? How can I Obtain Balloon Payment Assistance ?
Besides getting a Loan to pay the entire Balloon Payment when its due there are really only 4 reasonable options to assist you with the balloon payment, they are the following:
- Short Term Re-payment Plan/Forbearance Plan
- Loan Modification
- Refinance ( Only an Option if you have Equity )
- Sell Home and Satisfy Loans ( Only an Option if you have Equity )
I Need Balloon Payment Assistance, but I want to keep my home and or my home is underwater, How do I obtain Balloon Payment Assistance ?
If Selling is not an option, or if selling is an option but you don’t have equity or enough equity then a Loan Modification or Short Term Re-payment plan/Forbearance plan is the best option.
- Short Term Re-payment plan/Forbearance plan: A Short Term Re-payment Plan/Forbearance plan allows you to split the balance into 6 payments or more. In most cases its only 6 payments over 6 months as any longer could require a written agreement between borrower and lender agreeing to the new loan terms.
- Loan Modification : Loan Modifications are hard enough to qualify for as is, imagine being current and needing to ask for assistance on a payment not yet due, nightmare ?! Correct, however with the right assistance its possible to work out a Loan modification with your lender to restructure the term of the loan to extend the loan term and pay the remaining balance over a longer period of time than a Short Term Re-payment plan/Forbearance plan would allow.
How do I Apply for Balloon Payment Assistance thru a Loan Modification ?
For assistance or questions about Balloon Payment Assistance, Balloon Payment Loan Modifications, Nationwide Foreclosure Prevention Assistance, Short Sales , Mortgage Settlements, Loan Modification and DIL or anything Mortgage/Real Estate related please contact us at (888)558-5856 and or fill out the form below.