Updated almost 7 years ago on . Most recent reply
Thoughts on balloon loans
Local bank offers investment loans with 15% down instead of 20%. It is a balloon loan. What are your thoughts on these types of loans?
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@Antuan La after having worked at a small local struggling bank during the crash years poisoned me on balloon loans. The biggest risk is that when the balloon comes due your bank will not renegotiate/extend term and you cannot find a bank to refinance the note.
No one can predict where the economy will be in 5 or 7 or 10 years so no one can predict how aggressive or conservative banks will be when that note comes due.
Personally I try to avoid balloons