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Loren, Attorney
Category: Legal
Satisfied Customers: 33469
Experience:  30 years experience representing clients.
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can I do a balloon payment on a land contract

Resolved Question:

can I do a balloon payment on a land contract?
Submitted: 7 years ago.
Category: Legal
Expert:  Loren replied 7 years ago.
As a lender or borrower?
Customer: replied 7 years ago.

I am the home Owner, and we are going to sell our house on contract. We want $20,000. down but she only has $10,000 right now. Can I do a balloon payment on the other 10,000 once she has started her regular payments or do all balloon payments have to be paid in full before regular payments start? (Like Deferred Down Payment?)

Expert:  Loren replied 7 years ago.
If you are financing the sale you can set it up with whatever terms you negotiate with the buyer.
Customer: replied 7 years ago.
But how can the payments start if there is additional down payment set up? Do we caculate it from what we actually have down at time of sale? Then do we apply the extra down to principal only?
Expert:  Loren replied 7 years ago.
Yes, it is booked as a pay down in principal.
Customer: replied 7 years ago.
So then would we recaculate after the additional principal is applied to get the correct payment schedule?
Expert:  Loren replied 7 years ago.
That is one way. There are computer programs and websites that will calculate payment schedules with all sorts of permutations built in. Try googling mortgage payment schedules
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