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Balloon Payment at end of loan? General question

Discussion in 'Loan Modification' started by JOSUE, Mar 12, 2011.

  1. JOSUE

    JOSUE LoanSafe Member

    Hi All,

    BOA told me I was approved for UW. and I have no idea what to expect. But I do have a general question.

    I keep reading here about these HUGE balloon payments at the end of the loan one modified.

    Was wondering how they calculate that. I am and have always remained 60-80 days late and was wondering if these large amounts at the end of these mods are due to some folks who are like 25 month late or if they calculate it by the iterest they would lose by modifying the loan.

    Even thought I don't have high hopes regarding getting the mod, would just like to know what to expect.

    Thanks,

    Josue
  2. capote203

    capote203 LoanSafe Member

    The mod of my 1st now includes a balloon payment. Per the PSA, BAC were unable to extend the length of my loan, so although my loan matures in 24 yrs, it is amortized over 40 years. This causes a balloon payment. Has nothing to do with missed payments.
  3. facha

    facha LoanSafe Member

    Same here, maturity date stayed the same but amortized over 40 years. I have a HAMP and the guidelines do NOT REQUIRE the lender to extend the actual maturity date. I don't care about it because the interest is so much lower, just the first three months of 2011, I saved over
    $ 2500.00 in interest alone, can't beat that. So what if there is a balloon payment at the end, once we have a bit more income, I'll set up a savings account that will earn US interest until the maturity date comes around. Works very well for us.
  4. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member

    Ah HA!!!!!

    Same here!!!!!!!!!!!!

    I think this is their new Tactic!

    They are trying to give me an "in-house" at 3.75 5 years, 4.75 year 6 and 4.87 for 40 years EXCEPT
    that at year 22 ( they year my original loan would have ended) I have a balloon payment of over $350,000!!!!!!!!!!!!!

    This is almost like and interest only loan!

    I totally qualify for a HAMP or " in house " 2% step, so in questioning further I was told the good old

    " my investor will not extend the loan"

    My investor is BONY ( bank of new york ) it's a non GSE .

    I think they are full of it and am contacting BONY!

    What have they told you and who is your investor??

    Are these HAMP?

    HAMP does require they follow a certain order, starting with decreasing interest first,
    than extending time, than forbearance than forgiveness
  5. JOSUE

    JOSUE LoanSafe Member

    Yowza, Hopeful.

    Is that typical. $350,000. Would you mind if I asked you what you paid for the house? It almost seems not worth it unless you decide you want to stay in the house forever! Also, if it is for 40 years, why ask for it at year 22. I thought it was supposed to be at the end(of the new agreement).
    So, if at year 22, you cannot pay that huge amount, back to the drawaing board?

    I must sound like a dunce....

    .........Not sure I really get the balloon payment thing. My house has $110,000 left, so how would I figure out what the balloon payment would be. Not sure what it is worth, maybe $200,000

    Sounds crazy to me.

    but thanks for your replies,
    Josue


  6. capote203

    capote203 LoanSafe Member

    Hopeful - Servicing guidelines for the trust in which my loan is pooled, does not allow the servicer to extend the maturity date of the loan, although they do allow pretty much anything else. Yours may be the same as well. Have you been able to find the PSA for your loan?
  7. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member

    No but I wish I could!

    The reason it is 22 years is because I have already paid 8 years on the 30 year loan!

    The loan was originally for $520,000 ( I put 20% down )

    I figuired out what the balloon would be by using a mortgage calculator
    you can figure your's here

    Determine monthly payments on your Adjustable Rate Mortgage

    I have not yet seen the contract, it should be here on Monday but it was described to me this way.

    I am not buying that my investor will not extend terms if it is a positive NPV
    and is in their best interest, and if they will not, than BOA should buy it back because they screwed it up in the first place.
  8. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member

    I figured out what the balloon would be with this calculator.

    Determine monthly payments on your Adjustable Rate Mortgage

    I bought the hosue for 650,000 20% down , loan was for $520,000 almost 8 years ago, so there is 22 years left on
    the loan ( 6% fixed rate )

    I can not find the PSA and BOA will not give it to me.
  9. capote203

    capote203 LoanSafe Member

    Hopeful - The loans in the trust in which my loan is pooled all have essentially the same maturity date (give or take a month). It was propbably sold as a fixed term investment to the investors, therefore why the servicer cannot extend the maturity date of the loan. I took my loan out in late 2005, so had paid for 5 years prior to it being modified late 2010. Although, per the mod, it is now being amortized over 40 years (to lessen the monthly payment), it still matures in 25yrs. I already know that my balloon pymt will be around 630K.
  10. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member


    The deal they want to give me, I am sure they love, they actually make MORE money giving me these terms.
    Although I would be more likely to re default.


    If I do not agree and they foreclose than the term ends right than and there and they lose money anyway.
    I can't imagine they prefer that?

    I can't imagine any agreement saying that if we lose money by not extending the terms than we don't care?
  11. Hopeful In Hawaii

    Hopeful In Hawaii LoanSafe Member


    The deal they want to give me, I am sure they love, they actually make MORE money giving me these terms.
    Although I would be more likely to re default.


    If I do not agree and they foreclose than the term ends right than and there and they lose money anyway.
    I can't imagine they prefer that?

    I can't imagine any agreement saying that if we lose money by not extending the terms than we don't care?
  12. tookayear

    tookayear LoanSafe Member

    It took over a year but I got it.

    Hi you guys. I feel really bad that I have not come back on here to share with you on my hamp loan approval with B of A. its been a few months but finally got approved. Ive been paying my modified loan since February. There is hope so dont give up. I also have a balloon payment in 24 years at the end of my loan. I'm ok and can live with that because I believe property values will be much higher in 24 years and I will probably either sell by then or have money saved to pay it off. The loan is: year 1-5 2%, year 6 at 3%, year 7 at 4% and years 8-24 4.75% This is saving me hundreds a month. I can finally make ends meet and pay my bills. Don't give up and stay on top of it. Even if you cannot get a Hamp mod the banks have other modifications so hang in there. Don't forget that prayer also helps a lot!
  13. Cat Damiano

    Cat Damiano Mortgage Wars

    HI tookayear,


    Welcome to the forum and thank you for joining........

    Congratulations on your modification! Thank you for sharing the terms with us.
  14. eddieboysr

    eddieboysr LoanSafe Member

    It sounds like i have the same offer as you guys. Aurora just offered me 3.8125% with the loan maturing in 2036. I will have a balloon payment of around $123K. I was planning on trying to pay this loan off sooner so the interest building would drop down. Can you refi these loans? If so how long must you wait? mine is a traditional mod and not a HAMP like the rest of you guys.

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