Is a 5 year balloon right now just suicide?

[Tom Camarda]

Just throwing it out there to the masses... Discuss!

[Patti Robertson]

The answer to this is - it depends on your personal income/credit scenario and the equity position of your portfolio.  I have 5 year calls and I don't worry about them on iota, because I work hard to protect my credit, have a good equity position, and am improving my equity position with every payment.  At some point if you are a property collector you will get to the point that it is near impossible to get add'l mortgages with permanent financing.  Commercial loans are a great alternative, as long as both you/your company and your properties will be in a good position to requalify at the 5 year mark. You have to be diligent to maintain your credit and your equity position. In my case we choose 20 year amortization with 5 year balloons, but we pay double the required mortgage payment.  The longer term amortization improves your debt to income ratio, because the banks will use your minimum payment in the calculation.

Get as many 30 year fixed mortgages as you can before you start going commercial though.  Just don't let fear paralyze you from taking action!