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Understanding Changes to Your Mortgage Account

Consider your options when your mortgage balance comes due

What's happening and why?

The type of home loan you have lets you make payments for a set amount of time or “term.” Typically, the full amount borrowed, as well as some fees, will not be completely paid off when the term ends. The term’s end is also called the loan’s “maturity date.”

When the term ends, the remaining balance will be due in one lump-sum payment, and the amount may be substantially more than you’ve been paying each month. This is sometimes called a “balloon” payment.

For example, say you borrowed $100,000 with a 10-year term and a balloon payment due at maturity. Because balloon loans are designed to make your monthly payments smaller than they would be if the loan was completely paid off at the term’s end, the remaining balance of $8,000 may be due in full after 10 years.

Also, if you had a loan modification and have only been paying principal and interest on part of your loan, the full balance on the other part of the loan may now become due. Here’s how:

  • As part of the modification, a $100,000 loan was split into two parts — a $70,000 portion and a $30,000 portion.
  • A fixed monthly principal and interest payment was only required on $70,000 of the balance, while principal and interest payments were deferred on the remaining $30,000.
  • Each fixed monthly payment made towards the $70,000 and any additional amounts you may elect to pay reduces its remaining balance until eventually the amount due is less than the monthly payment.
  • At that point, the final monthly payment, as well as the full repayment of the remaining $30,000, are due in a single, lump sum.

There also are other circumstance where a balloon payment may become due. Because each person’s situation is unique, please give us a call to discuss how your account is affected.

What you can do now

There are a number of things you can do well in advance of the maturity date, and because some options take longer than others, it’s a good idea to start the process now.  Also, we can’t accept partial payments after the account reaches term maturity — we’ll only be able to accept the full balance — so you’ll want to be ready ahead of time. To find out the exact maturity date of your mortgage — or if a loan modification will affect the maturity date — as well as the amount that will be due, please call us at 1-877-898-4167 Monday through Friday, 10 am to 7 pm Central Time. One of our specialists can review your account and discuss the options that are best for you.

 FAQs 

Get answers to frequently asked questions about your maturing mortgage account. Learn more

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