Catherine Bell breaks down how balloon payments and amortization work. A $90,000 down payment cuts monthly payments to $3,654, but you still owe a massive $510,000 lump sum at the end. The total payout lands around $569,000 depending on how interest compounds.
Sorry. Just hit the X up at the top with your left. It'll pull it back in. So option 1 shows that they're going to get an estimated total payments over 24 months of about $92,000. And then we'll have an estimated balloon payment of $510,000. And so they'll walk away with $6,000— $600,000— $603,000. $603,000. And that's because of the amortization. If we did that interest only, it's going to change it. Change it again. We'll do it in a minute, but let's just run through this. Giving them $90,000 down brings us down to a payment of $3,654. And at the end, total payout after 24 months, plus the balloon, they went down in price a little bit. It's going to be $569,000.
