Sorry, this is kind of a goofy one! I'm not sure how I can explain it to make it understandable.
You can solve for either the Monthly Payment and Balloon Payment or the Balloon Payment Only.
When you solve for the Monthly & Balloon payments, fill in the first THREE fields ONLY and then press the Monthly & Balloon button. The monthly payment is based on a 30 year loan.
When you solve for the Balloon Only payment, fill in the first FOUR fields and then press the Balloon Only button. You can make the payment be whatever you want. Therefore, it acts like a Loan PAYOFF Calculator.
Remember, your lender may charge some fees and dues on the loan.
Study the examples below. I think they will provide clarification.
- You have a $300,000, 7 year balloon loan at 3.25% interest. You've been making monthly payments of $1,305.62 for 5 years and you're quite sure rates will be going higher... so you want to pay it off and refinance it for another 7 year balloon loan. After talking with your lender, you decide to take out a new 7 year balloon loan at 3.5% interest.
Now you need to know how much you'll have to borrow in order to pay off your first balloon loan.
- 300,000 for Loan Amount
- 60 for Months
- 3.25 for Interest Rate
- 1,305.62 for Monthly Payment.
- Press the Balloon Only button and you will see that you can pay off the first balloon loan with $268,645.80. Your lender agrees to give you another 7 year balloon loan for that amount and include the fees.
- You are getting a $150,000 mortgage loan with a 3 year fixed interest rate of 4.5%. After that the rate can change. You want to know what your monthly payment will be for the first 3 years and how much you'll still owe.
- 150,000 for Loan Amount
- 35 for Months
- 4.5 for Interest Rate
- Press the Monthly & Balloon button and you will see that your payment would be $760.03 and that you'll still owe $143,161.83 on the loan.
- Using the example above, let's say you want to make an extra principal payment each month. Instead of paying $760.03 per month, you're going to pay $1000 per month. Now how much will you owe after 35 months of payments?
- Leave everything the same, just change the Payment to 1000
- Press the Balloon Only button and you will see that you'll owe $134,171.07 on the loan, instead of $143,161.83.
- A friend gave you a $10,000 loan at 5% interest. It is expected to be paid back within 5 years. You have been making monthly payments of $200.00 (instead of the $188.71 calculated payment) for 17 months. Now you have a little extra money and would like to pay your friend back the entire amount owed.
- 10,000 for Loan Amount
- 17 for Months
- 5 for Interest Rate
- 200 for Payment
- Press the Balloon Only button and you will see that you can pay your friend back with $7,246.79.
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