The balance regular payments do not retire
Estimate a balance that remains due before a longer payment schedule ends.
Separate amortization length from the balloon date
Use the term that sets each payment.
Enter the earlier date when the balance is due.
Run a case where no new loan is available.
Test the plan without assuming a refinance
Payments are based on 30 years but the balance is due in seven
Enter the long amortization period and the earlier balloon date exactly as written. Treat the remaining balance as an obligation that must be funded, sold or refinanced - Not as a promised refinance. Stress the plan with a higher future rate and lower collateral value outside this fixed-rate estimate.
Treat the remaining principal as a real obligation
The remaining principal at the balloon month is separate from the regular payment due that month.
Balloon Payment Checklist: Plan for the Balance Due covers the controlling document terms and questions outside this result.
Read both timelines from the contract
- Principal and fixed or adjustable rate terms
- Amortization period used to set the payment
- Contractual balloon date
- Fees and conditions attached to the final payment
Contract details outside the balance estimate
- Fees
- Rate changes
- Contract-specific final-payment calculations