Balloon payment due? Start early.
When the balloon comes due, the whole remaining balance has to be paid off, refinanced or extended. We help you plan ahead, prepare the file lenders expect and compare your options before the deadline gets close.
The first call is free. Independent support: credit decisions remain with the lender.
How to avoid a last-minute scramble
- Know your exact maturity date and payoff
- Test the loan at today's rates
- Build the file before the bank asks
- Compare renewal and refinance offers
Same property, new math.
Most commercial loans are written with a balloon: payments amortize over 20 or 25 years, but the loan comes due in 5, 7 or 10. When it does, any lender underwrites it again from scratch.
The payment resets
A loan written at a lower rate can carry a much higher payment today, which squeezes debt service coverage.
A new appraisal
Loan-to-value is measured again. If the value has softened, you may need to pay down part of the balance.
Current numbers only
Lenders size the new loan on recent tax returns, interim financials and the current rent roll, not on the last refinance.
Six months out is not too early.
Confirm the maturity date and payoff, and run the loan at today's terms to spot any gap.
Gather and reconcile tax returns, financial statements, rent roll and property details.
Present a renewal request to your bank and, where it makes sense, to other lenders.
Appraisal, environmental, title and lender conditions, managed so the closing beats the deadline.
Have this ready.
- Last two to three years of business and personal tax returns
- Year-to-date income statement and balance sheet
- Current rent roll and copies of major leases
- Property operating statements
- Personal financial statement for each guarantor
- Current loan statement and payoff letter
- Schedule of other real estate owned and debts
- A short explanation of any dip in income or occupancy
Tell us about the loan. Pick a time to talk.
Two minutes. We review your details before the call, so the conversation starts with where you stand and what to do next.
Your information is confidential and used only to review your request. We never contact your lender without your permission.
Balloon payments: FAQ
What happens if I can't pay the balloon on the due date?
The loan matures unpaid, and the lender's options depend on your loan documents. Many lenders will discuss a short extension if a refinance is clearly in progress. For questions about your rights under the loan documents, consult an attorney.
Should I go to my current bank first?
Usually yes, since they know the property and your history. A complete file also lets you compare their renewal terms with other lenders' offers.
How early should I start?
Ideally six months before maturity. Appraisals, third-party reports and credit approvals all take time, and starting early keeps your options open.
Is UW-Flow a lender?
No. We provide independent underwriting and processing support. Credit decisions, terms and funding remain with the lender reviewing the request.
Related: Maturing loans · Bank won't renew · Loan moved to special assets
UW-Flow is a d/b/a of Altira Partners LLC, 501 E Las Olas Blvd, Ste 300, Fort Lauderdale, FL 33301. UW-Flow provides independent underwriting and processing support and is not a lender. Credit decisions, terms and funding remain with the lender reviewing the transaction. No guarantee of loan approval or funding. UW-Flow does not provide legal advice.