Balloon Payment

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Post Posted: Wed Nov 07, 2012 11:42 pm    Post subject: Balloon Payment

I have read that some people are getting approved loan modification and some have balloon payments at the end. Does all HAMP modification have balloon payments? What does a balloon payment exactly mean? Does this mean at the end of lets say a 30 year term you would owe the remaining balloon payment?
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Icon Mini Profile smithsussane

Joined: 18 Sep 2008

Posts: 12593
Location: Alaska
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Post Posted: Thu Nov 08, 2012 12:57 am    Post subject:

Hi Jack!

Welcome to forums!

In case of a loan modification, the lender lowers the interest rate in order to make the payments affordable for the borrower. Such a lower rate may remain for the whole term of the loan which might increase your loan term. Or else, it will remain effective for a certain period of time, after which you will be liable for paying a lump sum amount in order to pay off the balance debt amount.

Feel free to ask if you've further queries.

Icon Mini Profile jameshogg

Joined: 20 Dec 2005

Posts: 12160
Location: Nevada
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Post Posted: Thu Nov 08, 2012 8:47 pm    Post subject:

Hi Jack,

As far as I can understand, after the end of the 30 year term, you will be liable for paying the balloon payment to the lender.

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