Balloon Mortgage Explained...

Today's Mortgage Rates

Balloon Mortgage Programs Explained

BALLOON MORTGAGE: This type of mortgage works like a 30 year fixed mortgage but, after a pre-determined number of years, the entire remaining balance is due in one payment (If you can picture a baloon, the lump sum due at the end would be the large, blown up part of the baloon).

7 YEAR BALLOON MORTGAGE: The most common of the baloon mortgages, with a rate that is usually just slightly below that of a 30 year fixed mortgage. The payments are amortized over a 30 year period, so a large balance will still exist after the 7 year period when the remaining balance becomes due in full. The idea, however, is that you have sold the house or will be refinancing before the term of 7 years expires. This program works well for people investing in property or purchasing a 'starter' home: they like the lower payment while watching the market for a good long-term fixed rate or the best time to sell the property.

10 YEAR AND 15 YEAR BALLOON MORTGAGE PROGRAMS ARE ALSO AVAILABLE.