A loan with a fixed interest rate and monthly payment that becomes due in full, typically after 5 to 7 years
A balloon mortgage has a lower interest rate than fixed rate mortgages, and can save you money at the beginning. But, if you can' t afford to pay off everything you owe when the balloon "bursts" and becomes due, you need to refinance or sell, or risk foreclosure.
For some balloon mortgages on an owner-occupied property, the lender may let you extend the loan, without having to pay it in one lump sum. In exchange, you get a higher interest rate and agree not to apply for a second mortgage. Home buyers typically choose this type of loan because they plan to sell their home before the balloon pops.
Stop my foreclosure
A loan with a fixed interest rate
Mortgage definitions and Real Estate Terms, Consolidating loans, refinancing mortgages and reverse mortgage process available to anyone. This consumer information site contains several tools and guides to aid in purchasing or refinancing a home or commercial property.
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Friday, April 14, 2006
