Balloon Payment

[Alpha Diawara]

Can anyone explains to me please how the balloon payment works

Thank you

[Nik S.]

@Alpha Diawara 

Ok, my latest commercial loan:

20 years amortization 

7 Year Fixed Interest Rate w/ it ballooning at year 7.

MEANING, my total amount financed is divided amongst a 20 year repayment plan @ a certain % of fixed interest. At the end of my term (year 7), I have to either make a BALLOON payment (pay the balance of the loan off completely), OR Refinance the loan and restructure the deal with current interests rate OR simply sell the property before the 7 years and avoid making the payoff amount and/or refinancing.