I'd like to rent the property out for a few years, see where interest rates are at the end of the balloon, and decide whether to refinance in order to keep it or sell it. 

Many builders are offering great incentives right now for buying down your rate permanently, and/or paying some/all of your closing costs. 

@Timmy ChenWe are seeing some of the best investments for new homes because of the lender rate buy downs.

When rates drop, the option is to refinance.We're in the same position. 2 deals with ton of equity, yet have to wait until rates drop.I guess it's a good problem to have but it can be frustratingGino

The seller is paying 20k in mortgage interest, given the current interest rates I would need to 45kish in mortgage interest for the said STR.

Quote from @Sheila Nyandebvu: I believe the law requires them to provide a settlement statement 72 hours prior to closing, and you should definitely have one during closing.Do you have any documentation showing what rate they quoted when you first applied?

If so, what is your rates that you’re seeing. 

What rental rate do you need to break even?  

Plus, I see that you’re a realtor—that puts you ahead of quite a few novice investors.At any rate, feel free to ask me anything about investing in Chattanooga or other markets in the Sunbelt.

Any idea on what interest rates would be on that?