A ballon payment generally means the remaining loan amount is due though often there is an option to convert to a 30 year loan. You should revisit the terms of your loan. You may still need to show you qualify for the 30 year term, however.
Generally, with rates as low as they are you will want to consult with a mortgage broker or mortgage banker, to see what your alternatives might be if you elected to refinance the current loan.
You’ve indicated you have a seven year loan, with a balloon payment at the end of seven years. As you have been paying extra along the way, the amount you will owe at the end of the seven year – your balloon payment – will still be due, but it will be a lot less because of the extra payments.
If you contact your lender, they should be able to give you the new estimated balloon payment due.
Must have been a while since you took out that loan, as balloon notes are far and few between these days. It would certainly be worth looking at refinancing options, both with your current provider and others. I write loans nationally, would be glad to give you some options if you like.
In general, balloon notes are due in full at the end of the term. Some do allow for conversions to longer term loans, but there is no guarantee the interest rate on a conversion will be equal to the current best execution rate, which is in the 4.125-4.25% range for “best case” scenario borrowers.
The actual balloon payment amount will be recalculated at the end of the seven years and will show your additional payments. This will reduce the balloon amount.
You may want to review your loan documents and see if there is any penalty for early payoff. If not, it is very possible that refinancing now into a 15 or 30 year mortgage will be a better move than waiting until the contract requires the balloon.