I have been hearing from many of you that have some balloon
payments coming due. May not be a problem for many of you
BUT if you have a property that may not be performing very
well along with a very cautious appraisal and lending environment
it may not be as easy as you thought to refinance your property.
If you have this problem here are the two things you do…
1. See if you can get it refinanced, no matter what the value. If the
value of the property is lower than you expected and it will not cover
the amount you owe (in terms of what the bank will lend you) then
see if the bank will still lend on the property using their loan to value.
For example. Property worth $100,000 – you owe $85,000. Bank says
yeah we will loan on that property but only $75,000 – leaving you stuck
for the other $10,000.
OK. Just see if they will lend the $75,000 and if they will go to step 2.
2. Ask the lender to take what you can get and carry the remaining amount
over time. Back to our example. If we refinance we are short $10,000 aren’t we.
Ask the lender to take the $75,000 now and carry the other $10,000 on a separate
note. Many lenders will do this because they are getting a vast majority of their
money now and can live with taking the small leftover on a time payment
schedule.
OR if the above does not work then…
Ask for an extension. If you have been paying on time and have been doing
your part many times an extension will be granted. The key here is to ask for the
extension WELL enough ahead of time – before your balloon payment comes due
versus waiting until the last minute. Also ask for more time than you think you will need.
Many people get whacky when it comes to these items not working out as expected.
Just make sure you are proactive in your approach.
Boyd
www.noteswilltravel.com