Posted by Jeff M on February 05, 2002 at 14:01:21:
I ran the terms through the Quicken Calculator, and it gives a principle + interest payment (assuming monthly payments), it shows that you would have to pay $886.55 per month (The final payment would be a little less, $886.05). I don’t understand what the other $13.42 is paying for each month. Who pays the taxes and who pays the insurance? Is there any title insurance on this property? I am also confused… if you call the bank, and they tell you there are actually only 5 more payments instead of the 12 they sent to you, how does that hurt you? What, exactly, are you afraid of. If there is a balloon payment due, it is better to know now, so that you can make arrangements to re-finance the property for the balloon amount. If there is no balloon due, wouldn’t you rather know, so you don’t have to worry about it? As I understand it, most balloon payments are not a problem, you simply talk to the bank to refinance, or find another lender. The reason the banks do these type of balloon loans is so that they are not locked into a long term below market interest rate. The balloon allows them to adjust the rate to the current rates. My guess is that if you got this loan 15 years ago, the rates now are MUCH lower (ie. better for you). I hope this all works out for you.