Balloon Mortgage or ‘bullet loan’ or ‘balloon note’ are different terms defining a type of mortgage repaid in installments (including both principal and interest).The word “balloon” means that there is a balance at the end of the term period which has to be paid back. This amount keeps inflating with time just like a balloon.

Most balloon loans were interest-only payable loans in the 1920s. The balloon loans offered today calculate the payments in such a manner keeping in mind that the loan was going to be paid off completely over 30 years.

Some of the special features of balloon mortgage worthy of consideration are enumerated below:

• A very low interest rate is charged in comparison with other mortgages.
• Though Balloon loans can have many types of maturities, but most balloons that are first mortgages have a term of 5 to 7 years. Thus offering a shorter period of term than normal.
• Balloon mortgage requires lower monthly payments.
• Full tax benefits are offered in case of Balloon Mortgage.
• Balloon mortgage usually requires refinancing or selling of the house.
• Balloon mortgage is a fixed rate loan.
• A final “balloon” payment is required for the remaining balance of a mortgage. You may make small payments which will suit your financial condition.
• Generally balloon mortgages are available for 5 or 7 years. They are frequently described as a 5/25 or 7/23. These days 5/25 and 7/23 convertible balloon mortgages are getting more popular since they provide lower rates than conventional 30 year mortgages while still giving a fixed payment schedule for 5 or more years.
• Balloon mortgages are available even with 5% down payment. However, if you are making less than 20% down payment you will have to pay private mortgage insurance.

For other aspects of balloon mortgage : Click Here!

In our discussion we have considered the pros and cons of taking a balloon mortgage vis-à-vis taking some other mortgages. Now, we can conclude that a home buyer should definitely give a thought about taking this type of mortgage. If the borrower is looking for a lower rate of interest and is planning to stay in the house for a definite length of time then nothing can possibly be better than opting for a balloon mortgage.

More References

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Buy a home with Easy Qualifying : Buy a home, easy qualifying, no hassles, no bank financing.

Washington Mutual Mortgage

Virginia Mortgage Company – Competitive interest rates and products designed for first time home buyer and professional property investor – 1ST CENTURY MORTGAGE.

Realtor Debra Wilson : Realtor Debra Wilson – www.DebrasRealty.com Serving buyers and sellers in Carmel, Indiana and the surrounding Greater Indianapolis area.

Chicago Real Estate : Chicago Real Estate website for consumers offers free tools such as, FREE MLS home searching, real estate reports, mortgage calculator and monthly promotions for those in the market to buy or sell property.

Rangeley, Maine Homes for Sale and Real Estate Info : Your one-stop source for real estate services covering the Rangeley, Maine, Rangeley Lakes ME, and Mooselookmeguntic Lake areas. With a focus on exceptional service, you’ll find everything you’ll need from complete MLS listings, valuable home value calculation tools, and comprehensive area information!

Austin Home Search : Austin Real Estate Market – Search the Austin MLS for homes in Austin and surrounding areas. Austin Realtor, Texas Real Estate Broker, Ronnie Bredahl.

Texas Real Estate Classifieds : Texas Real Estate Classifieds, All Southeast Texas Counties. TX Real Estate Listings,real estate for sale,Homes For Sale By Owner and Mobile Homes.

Naperville Area Real Estate : Angus Woodbury – RE/MAX Affiliates – Relocation and residential specialist – sells Real Estate in Naperville and the surrounding area.

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