A Balloon Payment can put you in a very difficult situation ,needing Balloon Payment Help through a Loan Modification if you cannot afford to make the Balloon Payment. Most borrowers are unaware that its possible to modify a mortgage and extend the term of the loan so you can split the Balloon Payment up over years, sometimes getting you as much as 30 years to split up and pay the balance off.
What is a Balloon Payment ?
A Balloon Payment is the repayment of the remaining principal balance not yet paid off at the end of the loan term. A balloon payment is a one time larger-than-usual mortgage payment.
Why would there be a balance remaining at the end of the Loan term ? Shouldn’t it all be paid off ?
A fully amortized loan will have a $0.00 balance by the end of the loan term, some loans are generated with a balloon payment or a Balloon payment is created in effort to lower the Monthly payments.
With a Balloon Payment the amortization rate exceeds the loan term, leaving a balance remaining when the loan term has ended because the total loan amount was not amortized by the same years as the loan term. This allows you to pay principal and interest toward an amount much less than the amount borrowed.
Below Chart Shows Examples of how a Balloon payment can make a difference on monthly Mortgage Payments
What is Balloon Payment Help ? Why would my servicer modify my Balloon Mortgage ?
Besides getting a Loan to pay the entire Balloon Payment when its due there are really only 4 reasonable options for balloon payment help/Balloon Payment Assistance 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 )
Balloon Payment Help : Balloon Mortgage Loan Modification
Balloon Payment Loan Modifications are not very well known or common so they can be hard to obtain when not operating or going about it the right way but if done/presented correctly it would behoove any servicer to modify a loan with an upcoming Balloon Payment as it would allow them to split the payment up into months or years and generate additional income/collect more money on the remaining balance through interest. Most borrowers don’t have the available funds to make a large payment on their mortgage , but most borrowers refinance or sell before the balloon payment is due so its no biggie.
What if you have no equity so you cannot sell or refinance in order to pay the loan off and satisfy the balloon payment ?
If you have no Equity then its more of a reason to seek Balloon payment help through a Balloon Mortgage loan modification.
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.