Balloon Payment/Amortization

This example is continued from Mortgage.

Your client believes she will only own the house for 5 years (60 months) and then sell it. How much will the balloon payment (the repayment to the bank) be?

There are two methods for calculating balloon payment: the first is an estimate, the second more accurate.

1. Calculating Balloon in Mortgage View

At the bottom of Mortgage View are the variables Blln Yrs and Balloon. Enter the following:

Variable	Enter
Blln Yrs	5

Balloon should compute automatically. The estimated balloon payment will be $337,952.55 after five years.

2. Calculating Balloon with Amortization

On the menu, select Amortization and enter the following:

Variable	Enter
Beg Period	1
End Period	60

The End Period is 60 because the loan is in months (5 years x 12 months per year).

The amortization should calculate automatically. The balloon is $357,952.55.