Posted on: 15th Mar, 2010 01:12 pm
How much interest do we pay if we are putting 50% down and paying two balloon payments in 2 years? (2nd payment would be the final payment)
Your question is a little vague. Are you asking us for a rate? Or asking for the payment amount on the balloon payment?
We can't calculate the balloon without the rate.
Because it's owner financing, that rate can be anything you and the lender agree upon, as long as it doesn't exceed local usury laws (which don't apply to a mortgage in my state.)
Typically you'll see a rate designated as prime + x %, but prime is artificially low right now. 8-10% is usually seen as a fair rate in owner financing, but some owners might even find 5-7% attractive in today's rate environment with a short balloon as you've described.
We can't calculate the balloon without the rate.
Because it's owner financing, that rate can be anything you and the lender agree upon, as long as it doesn't exceed local usury laws (which don't apply to a mortgage in my state.)
Typically you'll see a rate designated as prime + x %, but prime is artificially low right now. 8-10% is usually seen as a fair rate in owner financing, but some owners might even find 5-7% attractive in today's rate environment with a short balloon as you've described.