🎈 Balloon Payment 101: What You Need to Know Before You Sign

When exploring mortgage or loan options, you may come across something called a balloon payment  and it’s important to understand exactly what that means before you commit.

A balloon payment is a large lump sum due at the end of a short loan term, typically 5–10 years, after making lower monthly payments that are calculated as if the loan were stretched over a longer amortization (like 30 years).

This setup can make your payments more affordable upfront, which is great for short-term investment strategies or bridge financing. But it also comes with risk if you can’t refinance or pay in full when that balloon is due, it could create serious financial strain or even lead to default.

💡 Where You’ll Commonly See Balloon Payments

• Commercial Real Estate Loans

• DSCR (Debt Service Coverage Ratio) Investor Loans

• Bank Statement (Non-QM) Programs

• Portfolio or Private Loans

  
  

🏠 Loans That Usually Don’t Include Balloons

• Conventional Fixed Loans (15 or 30 years)

• FHA Loans

• VA Loans

• USDA Loans

• Most ARMs (Fully Amortized)

Choosing the right loan structure depends on your goals, timeline, and financial flexibility. If you’re exploring options in Queens or Long Island, message us “BALLOON” and the LJ Mortgage Team will walk you through a clear breakdown of how it could work for your scenario and whether it’s the right fit.

LJ Your Local Guide to Homeownership!

📍127-03 Rockaway Blvd, South Ozone Park, NY 11420

📞 (516) 218-1297

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LJ Mortgage Team Inc. NMLS# 2120286

Purchase & Refinance NYS Registered Mortgage Broker, NYS Dept. of Financial Services.

Broker arranges mortgage loans with third-party providers.

MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER. Licensed By The N.J. Department Of Banking And Insurance, is a mortgage broker and arranges loans with third-party providers. We do not make any mortgage loan commitments or fund any mortgage loans.🔗 www.nmlsconsumeraccess.org

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