Are you considering buying a home or refinancing, and curious about your options? A Balloon Mortgage can be an excellent option if you are looking for a lower interest rate and believe that you will be in a home for a defined period.
In general, Balloon Mortgages have fixed rates and terms of 5 or 7 years. However, when the term expires, a final, large balloon payment is due to pay off the loan balance. With this type of option, the interest rates are lower than on a 30-year Fixed-Rate Mortgage, allowing a borrower to qualify for a larger home because of the lower interest rate - and therefore the lower monthly mortgage payment - is lower.
Balloon Mortgages can be great options if you expect to refinance before the balloon payment is due, feel that interest rates will decline in the future, or if you think that you might be selling your home in the near future. Let us help you discover if this is the right option for you!