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Updated almost 6 years ago on . Most recent reply

Allen Smith's profile image
Allen Smith's profile image
Allen Smith
  • Rental Property Investor
  • from Shreveport, LA
  • Member since Aug 15, 2019
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Allen Smith's profile image
Allen Smith's profile image
Allen Smith
  • Rental Property Investor
  • from Shreveport, LA
  • Member since Aug 15, 2019
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Allen Smith
  • Rental Property Investor
  • Shreveport, LA
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Creative Real Estate Financing

Balloon Mortgage to Finance Rental?

Allen Smith
  • Rental Property Investor
  • Shreveport, LA
Posted

I have been looking for the easiest way to finance my first rental property and I wanted to see if anyone has experience with Balloon Mortgages. I have a bank that will give me a ARV loan up to 85%, the 1st twelve months are interest only, and down payment is rolled into the ARV loan. After 12 months it swaps to a 5 year loan 20 year amortized. Bank says I can refinance at any time. Anyone used this strategy? I just feel like their is a big catch with this.

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Bob Okenwa's profile image
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Bob Okenwa
  • Real Estate Agent/Investor
  • from Peoria, Arizona
  • Member since Dec 10, 2016
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Bob Okenwa's profile image
Bob Okenwa's profile image
Bob Okenwa
  • Real Estate Agent/Investor
  • from Peoria, Arizona
  • Member since Dec 10, 2016
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Bob Okenwa
  • Real Estate Agent/Investor
  • Peoria, AZ
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Bob Okenwa
  • Real Estate Agent/Investor
  • Peoria, AZ
Replied

Balloons and ARMS are part of what led to the housing crash last decade. I'd avoid it and find a conventional 30 year loan.

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