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Someone Explain to my what a Baloon Loan is?

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Nov 11, 2008
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Someone Explain to my what a Baloon Loan is?

I remember learning about this in Finance Class a couple years ago, and how it's better to be used on a Car Loan, but I don't remember the specifics.

Can someone shed some light?
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Apr 21, 2008
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it's something that doesnt really exist too often in the real world, at least not on a personal level.

In the example of the car, just say you bought a car for 10k and decided to amortize the loan over 5 yrs. Instead of making equal payments and have it paid off in 5 yrs, you'd have much lower payments and you'd owe a "balloon" payment at the end of the 5 yrs.

Now I think you'd be hard struck finding a place that'll allow you to do this on a depreciating asset like a car. It's not very favorable for any bank as it puts their risk levels alot higher than they would like. With your reduced payments, if the loan went sideways after 2 years, you'd owe WAY more than the car was worth unless you put down about half of the cars worth.

I hope that helps a bit.
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Nearly all Canadian mortgages are balloon loans. The loan is structured such that you make a few years worth of payments, and then, wham, the remaining balance of the loan, at the end of the term, is due in full. No obligation exists on the part of the lender to extend new credit.

For instance, buy a $500k house, 5% 5-year balloon loan, 25-year amortization, you make payments of roughly $30k/year, and at the end of 5 years, you are required to make a one-time payment of approximately $460k to settle the loan.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Mark77 wrote: Nearly all Canadian mortgages are balloon loans. The loan is structured such that you make a few years worth of payments, and then, wham, the remaining balance of the loan, at the end of the term, is due in full. No obligation exists on the part of the lender to extend new credit.

For instance, buy a $500k house, 5% 5-year balloon loan, 25-year amortization, you make payments of roughly $30k/year, and at the end of 5 years, you are required to make a one-time payment of approximately $460k to settle the loan.

Wow Mark, I'm starting to actually think you are pitz's alt with that kind of willful ignorance coming out of your fingers. Mortgages are not typically balloon loans. Nearly no mortgages are balloon loans. In some cases there are balloon mortgages in commercial real estate, but in residential? Not a chance. Your description of a mortgage is false and intentional, as usual.

Do you even know what amortization means? Amortization is the total life of the loan by definition, champ. It's not possible you can have a 25 year amortization but have the full balance owing at the end of the 5 year term. You are only required to negotiate the next term in the life of the mortgage.

It makes as much sense as saying that you have a tank full of gas but your car will be out of gas when it has half a tank of gas. It's contradictory if you knew what you were talking about. The only person I ever saw here who was so willing to completely misunderstand any realm of finance for his own real estate hating ego was my good friend pitz. Hi Pitz!

Here's an example of a balloon payment mortgage: http://en.wikipedia.org/wiki/Balloon_payment_mortgage

To the OP: a balloon loan is one where the principal is not paid off completely by the end of the amortization period and instead a lump sum payment of the remaining principal from the life of the loan is due at the end. They do it this way to reduce the cost of the monthly payments. It's like a backwards down payment where instead of putting a lump of money in at the beginning you have to do it at the end. Sometimes they allow a re-financing at the end of the loan so you can do a second loan on that balloon payment because, let's face it, if you needed the lower payments in the first place you're probably not going to be able to save to make the balloon payment anyway.

You should stay away. They like to do this for cars because you can buy the car on a balloon loan and then trade it in at the end of the period because you can't pay the lump sum at the end. So your trade in value gets knocked to zero in exchange for knocking out the loan. Or sometimes you'll even owe depending on what car you got. You're better off leasing if that's the way you want to roll - at least you'll get more tax benefits if you're in that situation.
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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monkman wrote: Wow Mark, I'm starting to actually think you are pitz's alt with that kind of willful ignorance coming out of your fingers.
Not ignorance at all. I gave a description of a typical balloon loan structure heavily in use in Canada.
Mortgages are not typically balloon loans. Nearly no mortgages are balloon loans. In some cases there are balloon mortgages in commercial real estate, but in residential? Not a chance. Your description of a mortgage is false and intentional, as usual.
I must submit that you are wrong here. The definition of a balloon loan is that the balance, upon expiration of the term of the loan, is immediately due in full. This is exactly like a Canadian mortgage. Whether the bank decides to refinance you for a new loan, to pay off an existing balloon loan, is entirely up to them.

It's not possible you can have a 25 year amortization but have the full balance owing at the end of the 5 year term.
That's exactly what happens to Canadian mortgage loans typically. Hence, why it is a balloon loan.

Go read your mortgage contract. You will clearly see in the contract that repayment at the end of the term, in full, is required, and that, by signing the mortgage contract, you are in fact agreeing to this. Typical balloon loan structure.

edit: http://books.google.ca/books?id=okZN2av ... on&f=false
The design of mortgages has undergone significant chances since the Great Depression in response to changing consumer needs and the ability of origininating institutions to devise alternative funding methods. At that time most borrowers had mortgages that resembled balloon loans in which the principal was not amortized, or only partially amortized at the maturity date.
The underlined part is basically the same thing that happens to a typical Canadian loan that matures at 5 years; only partial amortization of principal over the payment interval.

Weird how the Americans basically moved away from balloon loans for housing and towards 30-year fixed, while Canada largely remained on the 5-year balloon loan structures.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Geez, monkman, did you even read the link you posted? It completely corroborates Mark's definition, and even gives the example of a 7-year term against a 30 year amortization as a balloon loan.
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[QUOTE]I must submit that you are wrong here. The definition of a balloon loan is that the balance, upon expiration of the term of the loan, is immediately due in full. [/QUOTE]

Well Pitz, you agreed with me on this note in different words so I'm not sure why you "submitted I was wrong". You're correct, at the end of the amortization period of a balloon loan the remainder of the balance is immediately due in full. Amortization, not term.

The rest is your usual load of bullschlaka. The bank owns your mortgage, you own your house. There is no (I repeat, no) review of the bank's assessment of you at term renewal. They automatically send you new paperwork for the next term for your approval. This is in the original mortgage paperwork stating they will renew your mortgage or sell it to someone who will (another bank). That does not mean you are required to repay in full, you numb skull. In between terms both parties carry the right to change the terms of the amortization.

You're getting a bad rate? Refinance with another bank with no penalties because your term is over. Don't want to own it anymore? Sell it and repay the bank in full. Won the lottery? Repay in full at the end of your term and you'll get no penalties.

This does not mean that the balance is owing in full, and it does not mean that the loan is complete. The end of the amortization period is when the loan is complete. Read the paperwork some time, Pitz. It's in english if you can manage to raise your literacy level.

25 years is a long time and a lot can happen. Term renewals happen every five years so the bank can say hey, you know what? That interest rate doesn't really make us money anymore. And so you can say hey, you know what? I found a better deal. I'm out of here, no penalties. It's a contract so outs have been written into it. You clearly don't understand what that means or how it applies.

When the term is up if you've been a horrible debtor and missed a bunch of payments and always had to negotiate special payment arrangements? Yeah, they could say get lost we don't want your business at the end of the term. Then you have to find a new bank to buy the mortgage and in a sense that's "payment due in full".

You're intentionally confusing a decision to end a business arrangement (mortgage contract) with completion of the loan (mortgage). The mortgage amortization doesn't change. They are not calling the debt and they have no rights in any mortgage contract I've ever seen to call the debt at the end of a term. It's not in there. Show me a mortgage that has these terms and I'll show you the idiot who agreed to them. But no such mortgages exist.

They just don't want to deal with you anymore so you have to find someone else who will or you have to get out of the assets you can't afford. It is not a calling of debt, it is not an end to the mortgage, and it is not purely at the mercy of the bank as you would like to imply.
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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Sanchez wrote: Geez, monkman, did you even read the link you posted? It completely corroborates Mark's definition, and even gives the example of a 7-year term against a 30 year amortization as a balloon loan.



Did YOU read it? Because you didn't. You saw the words amortization and balloon and thought WOW I TOTALLY GOT THAT MONKMAN DUDE BY THE BALLS. Why do I even bother with you clowns? This is all I have left to say:

"Adjustable rate mortgages are sometimes confused with balloon payment mortgages. The distinction is that a balloon payment may require refinancing or repayment at the end of the period; some adjustable rate mortgages do not need to be refinanced, and the interest rate is automatically adjusted at the end of the applicable period. Some countries do not allow balloon payment mortgages for residential housing: the lender must continue the loan (the reset option is required). To the borrower, therefore, there is no risk that the lender will refuse to refinance or continue the loan."

No repayment in Canada. Interest is automatically adjusted at the end of the applicable period in Canada. If you don't have one of these, you're an idiot and you deserve what you got. The majority of mortgages in Canada are not balloon mortgages. There are NO REPAYMENT CLAUSES IN CANADIAN MORTGAGES for the end of the term. I've never seen one, and I wouldn't sign one if I found it. That's if they're even legal in Canada. If they're anywhere they're on high risk mortgages and jack **** down payments.

Don't any of you idiots read your mortgage paperwork? Do you even know what these words mean or do you just go derp derp derp?
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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DanP wrote: it's something that doesnt really exist too often in the real world, at least not on a personal level.

In the example of the car, just say you bought a car for 10k and decided to amortize the loan over 5 yrs. Instead of making equal payments and have it paid off in 5 yrs, you'd have much lower payments and you'd owe a "balloon" payment at the end of the 5 yrs.

Now I think you'd be hard struck finding a place that'll allow you to do this on a depreciating asset like a car. It's not very favorable for any bank as it puts their risk levels alot higher than they would like. With your reduced payments, if the loan went sideways after 2 years, you'd owe WAY more than the car was worth unless you put down about half of the cars worth.

Doesn't EVERY car manufacturer offer a balloon payment option now? It seems like that's the only way they advertise now, since it makes dumb people think expensive cars are within their reach. The ones that advertise with a bi-weekly payment amount also piss me off!
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monkman wrote: that does not mean you are required to repay in full, you numb skull.

qft!
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monkman wrote: Well Pitz, you agreed with me on this note in different words so I'm not sure why you "submitted I was wrong". You're correct, at the end of the amortization period of a balloon loan the remainder of the balance is immediately due in full. Amortization, not term.
No, with a Canadian mortgage, you are required to repay the loan, in full, at the end of the term. Not the amortization. Since most people can't repay in full, they go out and find a new loan. But still doesn't change the fundamental structure of the loan.

Hence, it is a balloon loan. By definition.

Please read your mortgage documents if you have one. The bank's obligation to lend you money, for a Canadian mortgage, ceases at the end of the term of the mortgage, and has nothing to do with the amortization.
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Last post for me because I'm not going to educate the ********. Pitz and sanchez and anyone else who might be confused but not willfully ignorant like these two, here's how a balloon mortgage would work:

http://www.mortgagedictionary.net/what- ... +Mortgage/

Instead of a 25 year amortization mortgage, you would do a 7 or 10 year amortization and make payments AS THOUGH it was a 25 year amortization. At the end of the mortgage you still owe money. That's a balloon mortgage.

A typical Canadian mortgage is NOT a balloon mortgage because the debt is repaid at the end of the amortization period. Stop confusing "term" with "amortization". And stop confusing the rights of both parties in the mortgage contract at the end of the term with an end to the loan. It is not. At the end of my mortgage, I do not owe money. It amortizes after 25 years, not after my 5 year term. After five years BOTH the bank and I can get out but that does not end the mortgage prematurely nor does the bank have the right to call the mortgage.

They are available in the US, but even there it's not common in residential real estate. It's very hard to find in Canada and I retract it being illegal because you can find them here. But they're only for high risk or commercial clients. And that's where they should stay because this kind of product is dangerous and would make the subprime crisis look like a cakewalk.

I repeat, the typical Canadian residential mortgage is NOT A BALLOON MORTGAGE.
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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monkman wrote: A typical Canadian mortgage is NOT a balloon mortgage because the debt is repaid at the end of the amortization period.

Except the debt in a Canadian mortgage requires repayment, in full, at the end of each term. When you sit down with the banker or mortgage broker to sign a contract, you are only contracting to borrow for 5 years, not 25 years. If you aren't creditworthy in 5 years, or if the economy has changed and the banker wants his money back, he's under no obligation whatsoever to give you a replacement loan.

I don't see what's so controversial about this. The fine print of your mortgage documents will say that repayment, in full, is required at the end of the term, otherwise, the obligation goes into default and the can pursue the usual courses of legal action against you for recovery.

Or wait...maybe I'm trying to argue this point with someone who just wants to make up new definitions. Are you one of the guys on the other thread who thinks that CMHC loans aren't subprime, even though, nobody would use CMHC if they could get a prime loan?
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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monkman wrote: Last post for me because I'm not going to educate the ********. Pitz and sanchez and anyone else who might be confused but not willfully ignorant like these two, here's how a balloon mortgage would work:

http://www.mortgagedictionary.net/what- ... +Mortgage/

Instead of a 25 year amortization mortgage, you would do a 7 or 10 year amortization and make payments AS THOUGH it was a 25 year amortization. At the end of the mortgage you still owe money. That's a balloon mortgage.

A typical Canadian mortgage is NOT a balloon mortgage because the debt is repaid at the end of the amortization period. Stop confusing "term" with "amortization". And stop confusing the rights of both parties in the mortgage contract at the end of the term with an end to the loan. It is not. At the end of my mortgage, I do not owe money. It amortizes after 25 years, not after my 5 year term. After five years BOTH the bank and I can get out but that does not end the mortgage prematurely nor does the bank have the right to call the mortgage.

They are available in the US, but even there it's not common in residential real estate. It's very hard to find in Canada and I retract it being illegal because you can find them here. But they're only for high risk or commercial clients. And that's where they should stay because this kind of product is dangerous and would make the subprime crisis look like a cakewalk.

I repeat, the typical Canadian residential mortgage is NOT A BALLOON MORTGAGE.
Everything you have said is correct. Pitz/Mark77 is just making stuff up like he usually does to promote his "engineers are the only valuable profession" and "real estate is going to $0!" agenda. It's the same thing every time. He makes a ridiculous statement, backs it up with made up "facts", and eventually leaves the argument and/or changes his argument because he was proven wrong. That will be the case here.

Think about this logically. When is the last time you heard of somebody's bank recalling their entire loan and taking their house when they have kept up with payments? That would be a political shitstorm.
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DearSummer wrote: Everything you have said is correct. Pitz/Mark77 is just making stuff up like he usually does to promote his "engineers are the only valuable profession" and "real estate is going to $0!" agenda. It's the same thing every time. He makes a ridiculous statement, backs it up with made up "facts", and eventually leaves the argument and/or changes his argument because he was proven wrong. That will be the case here.

Think about this logically. When is the last time you heard of somebody's bank recalling their entire loan and taking their house when they have kept up with payments? That would be a political shitstorm.

Believe me, I know. I just want everyone else to know how a balloon mortgage would actually work if they were to get one, and that a typical mortgage is not a balloon mortgage.

He's just doing his usual spiel. He can't even read graphs. He once showed me a graph to "prove" that housing had lost 20% of it's value in a year but neglected to read the title of the graph and see that it was a decrease in year-over-year growth not overall value. He intentionally misinterprets to prove his "points" that support his endgame. We already know he can't afford a mortgage or he'd have actually seen paperwork and wouldn't be claiming that there are clauses that don't exist. Or maybe he's just underwater on his mortgage and getting his hate on - I could never tell which but he always struck me as a pure poor envious hater.

And when I call him on it he just throws back exactly what I said in the first place (ie. read the paperwork!) or completely changes the topic. What does the CMHC have to do with anything? I'll tell you: Pitz isn't really illiterate. He just can't see the forest for the trees.
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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DearSummer wrote: Think about this logically. When is the last time you heard of somebody's bank recalling their entire loan and taking their house when they have kept up with payments? That would be a political shitstorm.

*sigh*, who said anything about recall? We're talking about balloon loans here, of which, a Canadian 5-year term mortgage is a quintessential example. Many people, over the years, have lost their houses because they could neither make the balloon payment in full at the end of the term, nor find replacement financing on terms that were mutually acceptable. No "political [dung]storm" involved, but rather, simply a case of people being over-extended.

Its bizarre how much emotion comes into these threads when such simple concepts are explained.

Just to recap, for the benefit of the original poster, here is an example of the cashflows associated with a balloon mortgage:

-$500,000 (lender disbursement) t = 0
$35,699 (year 1 payment) t = 1
$35,699 (year 2 payment) t = 2
$35,699 (year 3 payment) t = 3
$35,699 (year 4 payment, t = 4
$35,699 (year 5 payment), t = 5 <-- normal mortgage payment
$442,538 (year 5 payment) t = 5 <-- balloon payment.

Now, typically, one who borrows $500k doesn't have $442k sitting around. So they go find a new loan for the balance remaining ($442,538):

-$442,538 (new loan disbursement to make ballon payment on existing loan) t = 5
$35,699 (year 6) t = 6
..
..
$368,981 (year 10 balloon).

etc.

As you can see, Canadian loans are structured such that they are essentially a series of balloon mortgages. At the maturity of the balloon mortgage, one can move to any other lender they want, or pay the loan off, in full, without any prepayment fees, or other penalties. If one cannot procure replacement financing or repayment in full, then they go into default.
And when I call him on it he just throws back exactly what I said in the first place (ie. read the paperwork!)
Yes, you need to read the paperwork. It will clearly say, somewhere in there, that all amounts owing are due in full at the expiration of the mortgage term, and that the lender can use whatever legal action is necessary, at your expense, to recover such amounts from you or your estate. There is no obligation whatsoever on the part of a lender for a Canadian mortgage to lend to you beyond the agreed-upon term of the loan, even if you are making all required monthly payments.
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monkman wrote: Believe me, I know. I just want everyone else to know how a balloon mortgage would actually work if they were to get one, and that a typical mortgage is not a balloon mortgage.

He's just doing his usual spiel. He can't even read graphs. He once showed me a graph to "prove" that housing had lost 20% of it's value in a year but neglected to read the title of the graph and see that it was a decrease in year-over-year growth not overall value. He intentionally misinterprets to prove his "points" that support his endgame. We already know he can't afford a mortgage or he'd have actually seen paperwork and wouldn't be claiming that there are clauses that don't exist. Or maybe he's just underwater on his mortgage and getting his hate on - I could never tell which but he always struck me as a pure poor envious hater.

And when I call him on it he just throws back exactly what I said in the first place (ie. read the paperwork!) or completely changes the topic. What does the CMHC have to do with anything? I'll tell you: Pitz isn't really illiterate. He just can't see the forest for the trees.

..yeah don't worry about it Monkman. Mark has a tendency to bait and switch - and when he is clearly proved wrong he goes and changes topic which leads you down another path entirely. Either way, his only objective when it comes down to it is to somehow "prove" that Canada's mortgage market is on unstable ground and some sort of crash is forthcoming at which time he will be vindicated and say "I told you so". My advice to you Monkman - don't get into it with Mark - I mean just look at his post above :facepalm:
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DearSummer wrote: Everything you have said is correct. Pitz/Mark77 is just making stuff up like he usually does to promote his "engineers are the only valuable profession" and "real estate is going to $0!" agenda. It's the same thing every time. He makes a ridiculous statement, backs it up with made up "facts", and eventually leaves the argument and/or changes his argument because he was proven wrong. That will be the case here.

Think about this logically. When is the last time you heard of somebody's bank recalling their entire loan and taking their house when they have kept up with payments? That would be a political shitstorm.

Where do you read that bank would be recalling the loan? Why do you relate this "balloon loan" question to someone's viewpoint about the RE market? Please, this is a forum for ppl to share thoughts and ideas. Dont turn this into some kind of fact proving battle. Its really meaningless because there is no way anyone could back up any numbers or stats with real "facts".
monkman wrote: Believe me, I know. I just want everyone else to know how a balloon mortgage would actually work if they were to get one, and that a typical mortgage is not a balloon mortgage.

He's just doing his usual spiel. He can't even read graphs. He once showed me a graph to "prove" that housing had lost 20% of it's value in a year but neglected to read the title of the graph and see that it was a decrease in year-over-year growth not overall value. He intentionally misinterprets to prove his "points" that support his endgame. We already know he can't afford a mortgage or he'd have actually seen paperwork and wouldn't be claiming that there are clauses that don't exist. Or maybe he's just underwater on his mortgage and getting his hate on - I could never tell which but he always struck me as a pure poor envious hater.

And when I call him on it he just throws back exactly what I said in the first place (ie. read the paperwork!) or completely changes the topic. What does the CMHC have to do with anything? I'll tell you: Pitz isn't really illiterate. He just can't see the forest for the trees.
I am not sure what you are trying to accomplish by saying he cant afford a mortgage? Is this some sort of personal attack or insult? So what if he has a bearish view of the RE market? Does that bother you? I have not read every posts in this forum, but I generally find mark77's post more analytical than most. WHETHER OR NOT he bait or switch, at least the effort is there.

Back to the Balloon loan question, quoting from investopedia

"What Does Balloon Loan Mean?
A type of loan which does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan.

Balloon loans can be attractive to short-term borrowers because they typically carry a lower interest rate than a loan with a longer term. However, the borrower must be aware of refinancing risk and/or the risk that the loan will reset at a higher interest rate.

Some balloon loans, such as a five-year balloon mortgages, have a reset option at the end of the five-year term that allows for a resetting of the interest rate (based on current interest rates) and a recalculation of the amortization schedule based on a remaining term. If a balloon loan does not have a reset option, or frequently even when it does, it is expected that the borrower will sell the property or refinance the loan before the end of the original loan term."

Based on this definition, it sounds like a typical Canadian mortgage. You can argue the technicality of the mortgage agreement all you want. To me, it comes down to cheap short term financing with potential refinancing risk.
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gomyone wrote: ..yeah don't worry about it Monkman. Mark has a tendency to bait and switch - and when he is clearly proved wrong he goes and changes topic which leads you down another path entirely. Either way, his only objective when it comes down to it is to somehow "prove" that Canada's mortgage market is on unstable ground and some sort of crash is forthcoming at which time he will be vindicated and say "I told you so". My advice to you Monkman - don't get into it with Mark - I mean just look at his post above :facepalm:

Yeah I see what you mean. He's just continuing to insist that clauses exist that don't exist. His examples above don't have any relevance; he might as well say the sky is blue so the sun must be cold. He keeps clinging to his inability to distinguish between amortization and terms. It's not subtle: he always draws these things into an overall "mortgages are bad mmmkay?" debate that's unwinnable when you're dealing with someone who's unwilling to discuss anything but the conclusion.

Thanks gomyone. I won't waste any more time on him.

I'm pretty sure sanchez is another of his alts, too. He has a lot of time on his hands. Maybe if he'd do some work he could afford a mortgage instead of trying to demonize anyone who has one. THE POWER OF CHRIST COMPELS YOU, PITZ.
In December 2012 the experiment perpetuated by the NWO (New World Order) of untying currency from gold and creating a volatile fiat currency will collapse leaving us all to die rioting amongst ourselves while the rich shoot themselves to Mars in a rocket to a colony they've been preparing since 1969 when they faked the Moon landing. Be prepared: come live with me in the forest in a log cabin with ammunition and food rations. PM me for details of the plan.
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Toronto
DearSummer wrote: When is the last time you heard of somebody's bank recalling their entire loan and taking their house when they have kept up with payments? That would be a political shitstorm.
monkman wrote: There is no (I repeat, no) review of the bank's assessment of you at term renewal. They automatically send you new paperwork for the next term for your approval. This is in the original mortgage paperwork stating they will renew your mortgage or sell it to someone who will (another bank). That does not mean you are required to repay in full, you numb skull. In between terms both parties carry the right to change the terms of the amortization. [...]

You're intentionally confusing a decision to end a business arrangement (mortgage contract) with completion of the loan (mortgage). The mortgage amortization doesn't change. They are not calling the debt and they have no rights in any mortgage contract I've ever seen to call the debt at the end of a term. It's not in there. Show me a mortgage that has these terms and I'll show you the idiot who agreed to them. But no such mortgages exist.


It's only happened to subprime borrowers at non-big-bank lenders so far, but it has happened:


"The Chatham Daily News reported on Monday that Rod and Joyce Marentette of Chatham -- who never missed a mortgage payment -- are facing this situation after their lender, Xceed Mortgage Corporation in Toronto, decided not to renew their mortgage, because their poor credit rating doesn't qualify them for mortgage insurance. "

"For the past three years, Lisa Matthews has never missed a mortgage payment – handing over $292, like clockwork, every week. But if nothing changes, a bailiff, acting at the request of her mortgage lender, will ring her doorbell and tell Ms. Matthews, her two daughters and her boyfriend to vacate the two-storey house for good."

"But when the mortgage – which carried a 9 per cent interest charge – came up for renewal, she received a letter from lender Xceed telling her that the company wasn’t interested in striking a new deal."

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