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Any Balloon Loan Experiences?

  • 22-09-2006 10:50am
    #1
    cusesoftie
    Closed Accounts Posts: 1 ✭


    I went on www.mortgages-for-less.com and learned about all the mortgage options available to me. I had never heard of a balloon loan before. I guess that is a good choice for smaller loans and if you’re going to get a lump sum in the future. Anyone have any personal experiences to share with this type of loan?


Comments

  • #2
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    You are in Ireland?

    In general, I wouldn't expect this to happen in Ireland, at least not for a term longer than a year or two. Even in the US it is going to happen a lot less now, because interest rates have increased so much. At the very least you are expected to be paying off the interest in Ireland.

    There is one case where a loan is available like this; it is where you are over 40 and do not have full pension provision. Rather than paying off your mortgage you make contributions to a pension fund and this amount is used to pay off your mortgage at the end of the mortgage term when your pension matures. (This makes sense for tax reasons). However, you have to keep making the pension contributions or else the bank will foreclose.

    Would be happy to be contradicted on any of this.


  • #3
    ircoha
    Closed Accounts Posts: 2,290 ✭✭✭ircoha


    OP: Are u based in US?

    for anyone interested in ballon loans see
    http://www.mtgprofessor.com/A%20-%20Balloon%20Loans/is_a_balloon_loan_better_than_an_arm.htm

    or http://www.tcalc.com/tvwww.dll?CalcLoan?Tmplt=balloon.htm&Cstm=myrateplan&BlnPmt=180


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