Creative Deal--How big of a balloon payment can I make?
Looking at a portfolio purchase. 180k purchase price, 20k down, balloon after 5 years. Payments based on 15 year amortization with 6% interest.
My question, at 5 year mark, if the properties appreciate at 4%, I should be able to get $153,000 with 70% LTV. I would have a balloon payment of $123,000. Is that enough spread to be comfortable? I've never done a balloon payment before and it scares the heck out of me.
Any advice would be greatly appreciated!