On the maturity date written in the note, commonly three, five, seven, or ten years after closing. The whole remaining balance is due that day in one payment. The date and the amount are both in the note and the disclosures.

Whatever balance remains on the maturity date. With payments calculated over thirty years and the note due at year five, roughly 93 percent of the original loan is still owed at typical rates; at year seven, roughly 90 percent. On an interest-only balloon, the entire original loan. The calculator on this page shows the figure for your note.

Often, but it is not assured, and the note does not promise it. A refinance on that date depends on your income and credit at that time, the property's appraised value, interest rates, and which loan programs exist then. The CFPB warns that if you cannot refinance or sell, you may face foreclosure. Start the review eighteen to twenty-four months before maturity.

The loan is in default on the maturity date. The lender can charge default interest and fees and begin foreclosure. Missouri foreclosures are usually non-judicial and can move in a few months; Kansas foreclosures are judicial and take longer, with a redemption period. Either way the outcome the CFPB describes is a forced sale or loss of the property.

It depends on the note. Some have none; some seller-financed and commercial notes charge one. The old version of this page said there was never a penalty, and that is not something anyone can promise across every note. Read the prepayment clause before signing.

Yes, if the note has no penalty or you accept the penalty, and if the sale nets at least the payoff after commission and costs. The risk is a market that leaves you short on the date you need to sell. Build a 10 percent value cushion into the plan.

Not for owner-occupied homes. We review balloon notes people have been offered, usually seller financing or a commercial loan, and price the alternatives: a 30-year fixed, a 15-year fixed, an ARM with caps and a disclosed maximum payment, a DSCR loan for a rental, or a single-close construction loan. If one of those does the job without the cliff, that is what we recommend.

No. An ARM keeps going after the initial period; the rate adjusts within disclosed caps and the maximum payment is known in advance. A balloon stops: the balance is due in full. An ARM carries payment risk; a balloon carries refinance-or-lose-the-house risk.

Under federal ability-to-repay rules, a balloon feature is generally not allowed on a qualified mortgage, with an exception for certain small creditors operating in rural or underserved areas. Lenders can still make non-qualified loans with balloons if they consider the borrower's ability to repay. Seller financing by a private party and business-purpose loans on rental or commercial property follow different rules.

Start now. A soft-pull credit review, income documentation, a value check, and a program choice while there is time to fix anything. The refinance is far easier eighteen months out than eighteen days out.