How Do You Calculate A Balloon Mortgage Payment?
A balloon mortgage, in many ways, appears to be much like a 30-year fixed-rate mortgage. The monthly payments on the balloon mortgage are determined as if the loan were to be paid off in 30 years. The difference is a balloon mortgage only finances the home for a set period, usually 5 to 7 years. After the finance term, the balance on the mortgage is due in full. Find a mortgage calculator to use for calculating the payments and to see how much the balance is going to be on the mortgage when the balloon comes due. You can borrow a mortgage calculator if you stop in a local or bank or realtor’s office, but the easiest way to gain access to one is on the Internet. There are several available for use free of charge. Enter the full mortgage amount into the calculator. The enter the number of years that your balloon mortgage is for, typically this is 5 to 7 years, but some balloons might be shorter or longer terms. Put in the interest rate of your loan and then choose the type of prepayments
