Question
Joe and Mary are on fixed income. They took out a 15 year balloon loan in 2005 and received an $89,250 loan at 6.89% interest
Joe and Mary are on fixed income. They took out a 15 year balloon loan in 2005 and received an $89,250 loan at 6.89% interest from a lender. After fifteen years of paying $587 a month for a total of $105,660 they will owe a balloon payment of $65,780.
Loan Options:
Interest only Loan
7 year Balloon Loan
30 year Loan with a Fixed interest Rate
1. Would you discuss the remaining loan program options with the borrower? Why or Why not?
2. Are there any borrowers who would be ideal to reap the benefits and manage the risks of these nontraditional loans; i.e.. IO, balloon, ARMs, etc.?
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