Balloon Note In Mortgage In Clark
Category:
State:
Multi-State
County:
Clark
Control #:
US-00425BG
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Word;
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Description
A Balloon Note is a Promissory Note that has one large payment (the balloon payment) that is due upon maturity. A balloon note will often have the advantage of a very low interest rate, thus requiring little capital outlay during the life of the loan. The major problem with such a loan is that the borrower needs to be self-disciplined in preparing for the large balloon payment due when the loan matures. Of course refinancing the note upon maturity is always a possibility.
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Under this arrangement, the borrower pays interest on an annual basis to the lender and makes a balloon payment of principal at the end of the payment term. A balloon mortgage allows you to enjoy low monthly payments for several years — with a big catch.A balloon mortgage is usually rather short, with a term of five to seven years, but the payment is based on a term of 30 years. Following that default, the plaintiff accelerated payment. A balloon mortgage is a loan with low initial payments, but it requires the borrower to repay the balance in full in a lump sum. There will be no prepayment penalty.