Refinancing Balloon Loans

Balloon loans are very dangerous because of their short terms. Everyone who takes them out has the same defense. I’ll be refinancing the balloon loan before it comes due. This is a big gamble. There is a lot that can happen in five years. Your finances can change for the worse. The market can change for the worse with home values dropping, which makes it impossible for you to refinance. The mortgage market may tighten up with it becoming harder to access money even for refinances. These last two elements are happening now and the rate of mortgage defaults and foreclosures are through the roof.