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#2265524 - 01/31/22 07:58 PM 5-Year Balloon Loans
NoJustNo Offline
100 Club
Joined: Oct 2013
Posts: 193
Banks still need to ensure that the balloon payment does not come payable during the first 5 years after the date of the first payment, right? I'm a little lost in the current situation with all the changes/almost changes, etc.

(ii) Special rules for loans with a balloon payment, interest-only loans, and negative amortization loans. A creditor must make the consideration required under paragraph (c)(2)(iii) of this section for:
(A) A loan with a balloon payment, as defined in ยง 1026.18(s)(5)(i), using:
(1) The maximum payment scheduled during the first five years after the date on which the first regular periodic payment will be due for a loan that is not a higher-priced covered transaction; or
(2) The maximum payment in the payment schedule, including any balloon payment, for a higher-priced covered transaction.

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Ability to Repay/Qualified Mortgage Rule
#2265526 - 01/31/22 08:36 PM Re: 5-Year Balloon Loans NoJustNo
rlcarey Offline
10K Club
Joined: Jul 2001
Posts: 78,555
Galveston, TX
Nothing has changed on that requirement.
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