Owner financed - 5 year balloon note

what do you mean by giving the house back to the owner? have you had first and second mortgage on it? do you mean you cannot afford the payment now or have difficulties paying the mortgage? please give more details about your loan information so that people here can help you.

We can not afford the payments any longer. We would like to do this in lieu of foreclosure or seizure. We are currently behind 1 payment.

The owner financed the home for 5 years - after 5 years we are to get a loan thus giving the owner full payment for the house. We just bought the house in Nov 2008 by owner finance. We do not have a second mortgage. I hope that this makes sense.

tdavis, it makes sense, yes. you need to contact your lender, of course, and explain your situation. that might not be a pretty conversation to have, but it's a necessity.

since it's a private loan (the home seller), you won't run the risk of ruining your credit. i am assuming, of course, that this person is not in business of lending money. that would mean your mortgage is unreported to credit agencies. now, of course if you get to a foreclosure situation, that'll appear on credit. that's why it's far better to do things now to rectify the situation. hopefully, your seller/lender will be amenable to what you suggest.

I am holder of balloon Note due January 2011. By what date or month should I notify the payee to remind him of the upcoming all due date ? Also is it customary to offer an extension or modification of terms if he is not able to pay on due date? If so what would be a correct interest rate increase? Interest rate is now at 5%

Hi Linda,

Your query has been replied to in the given page:
http://www.mortgagefit.com/loantalk/balloon-notedue.html

Take a look at it. Hope it helps you.

Thanks