The Benefits of a Balloon Payment

Ashley: The loan is a typical loan like anything else, but you have what's called the balloon payment. So when I bought my very first real estate investment, I had an 18 month, or I think it actually was a 12 month loan from a bank to fund the purchase and the construction. And then I had a balloon payment at the 13th month that was the principal plus any interest it had accrued during that timeframe. A lot of these loans that have balloon payments or that have these interest only structures during those 12 months, you're paying interest so your principal never gets decreased. It gives you enough time to set up your refinance, like your long term debt and get that

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