Balloon Amortization Sureties With Interest In Massachusetts
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The most significant risk of a balloon mortgage is foreclosure if the borrower can't make the balloon payment at the end of the term. Foreclosure can result in the loss of the home, emotional distress, and impact the borrower's credit negatively, generally for seven years.
However, the larger balloon payment at the end represents a substantial financial obligation that needs to be carefully planned and managed. Accounting Treatment: The balloon payment is usually recorded as a liability in the financial statements until it becomes due.
Disadvantages of a Balloon Payment Usage Restrictions. Car finance with a final balloon payment typically requires usage restrictions. Not Ideal for Those With Lower Credit Scores. Not Optional for Lease Agreements. Expensive Final Payment.
