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![]() ![]() The balloon payment calculated by our calculator is the lump-sum payment you’ll be required to make at the end of your loan term. ![]() Ensure that you’ll be able to afford your monthly payment, and your ability to continue making payments if your income temporarily drops. This payment consists of a portion of principal and interest, which means that the balance of your loan will go down with each subsequent payment. The first figure provided by our calculator is the minimum monthly payment you’ll be required to make for the length of your loan. Here’s what to consider for each of these figures. Once you’ve entered all of the figures for the calculator, you’ll be given outputs for your monthly loan payment, your final lump-sum balloon payment, and the total interest charges you will have paid over the life of the loan. The figure entered in this field should be shorter than the mortgage term or amortization period of the loan. For example, entering a figure of “10” into this field means that you’ll have 10 years to satisfy the loan. The balloon payoff year is how many years you have before you must pay it in full. As a result, you won’t have had enough time to pay off the entirety of the loan and would be required to make a lump-sum balloon payment on the designated payoff date. Typically on a traditional loan, making regular payments throughout this timeframe will allow the loan to be fully paid off at the end of the amortization period.Ī balloon mortgage, however, requires full repayment before the end of the amortization period. ![]() The longer the term, the lower your payments will be. The mortgage term, or the amortization period of the loan, is the length of time your payments are spread over. Your loan payments, however, are not impacted by the APR. Your loan’s APR is only meant to illustrate the total cost of your loan once certain closing costs and fees have been included. One thing to note is to not confuse this with your loan’s annual percentage rate (APR). Alternatively, you may also be able to find it on your closing documents. This figure should be provided to you by the lender as part of the approval process. Interest rates on a balloon mortgage tend to be lower than conventional loans. The difference between that and the purchase price would mean you’d need a loan amount of $450,000. In most cases, the difference between your home’s purchase price and the down payment will be equal to the loan amount you’ll need to pay for the remainder of the property.įor instance, a home with a purchase price of $500,000 and a down payment of 10% would equate to a $50,000 down payment. Depending on the type of loan you get, you could be required to make a minimum down payment from 0% to 25% or more of the property’s purchase price. Your down payment is the amount of money you’ll be putting towards the property. Similarly, a property’s appraised value may not always be the same as the agreed-upon purchase price. Closing statements prepared by an escrow company, for instance, may not verify the accuracy of the most recent figures until the final stages of closing. However, these figures may not always be correct. Other places you can look to confirm the correct amount can include a copy of the appraisal report or your closing statement. Be sure that you are reviewing the most recent copy along with any applicable addendums or counteroffers. To verify the correct amount, we recommend looking at a copy of your fully executed purchase agreement. If you are purchasing a home, this figure will be what you’ve agreed to pay for the property. Below is a brief description of each of these inputs. The balloon payment calculator we’ve provided will tell you what your monthly payments will be based on certain figures such as the interest rate, your down payment, and the purchase price of a property. Visit Lendio Balloon Mortgage Calculator Inputs Working with it allows you to get paired with a dedicated loan specialist who can match you with the lenders best suited for your circumstances. If you’re looking for a balloon mortgage, consider checking out Lendio, a business loan broker with over 75 lenders in its network.
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