Two clocks in one note
The illustrative example uses $500,000 of principal, 6% annual interest, 25-year amortization and a five-year maturity. An interest-only version pays $2,500 per month and still owes $500,000 at maturity. The amortizing version has a higher monthly payment and a lower remaining balance.
The calculator uses monthly interest and level end-of-month payments. It excludes fees, default interest, prepayment charges, taxes and closing costs. It does not determine legal enforceability or the suitability of financing.
Ask what retires the balloon
Review cash available at maturity, possible sale proceeds and refinancing assumptions separately. A refinance case needs a future NOI, lender terms and a supportable valuation. If those assumptions do not work under stress, a long amortization schedule does not fix the maturity problem.
- Stress future interest rates and debt-service coverage.
- Price future capital work separately from debt payments.
- Identify extension rights, reporting requirements and default remedies with counsel.
Compare the whole offer
A cash price and a seller-financed price are not interchangeable. Timing, counterparty credit, priority of liens and transaction costs affect the seller’s outcome. Compare cash at closing, the payment stream and the risk of principal repayment rather than simply choosing the highest headline price.
Transaction documents and tax treatment require review by the appropriate licensed advisers. This is a model for organizing questions, not a loan offer or a promise of refinancing.
