What to do if you can’t afford your balloon mortgage payment
If you can’t afford the lump sum payment, you have three options to consider:
- Ask for an extension: Lenders may provide borrowers more time to pay back the balloon payment, so it’s worth requesting an extension.
- Refinance your mortgage: You may be able to refinance your mortgage.
- File Chapter 13 bankruptcy: In a Chapter 13, you can repay the balloon payment over 5 years and protect your home from any threatened foreclosure.
Example: $30,000 Balloon Payment
If your mortgage accelerated, leaving a $30,000 balloon payment due immediately, you can file a Chapter 13 bankruptcy to stop any threatened foreclosure and propose to pay that $30,000 balloon over 60 months with interest.
The Bottom Line
Only a Chapter 13 bankruptcy can modify the terms of the matured mortgage affording you the option of repaying a balloon payment in 5 years, and preventing any threatened foreclosure. It’s free to chat with me about your options – you can call or text me at 215.551.7109.