Balloon Mortgages are so named as they are only for a fixed period of time at which time a final balloon payment is due.
The interest rate will be from .5 to 1.0 percent less than for a 30 year mortgage, and can save you thousands of dollars, especially if you do not plan to stay in the house for more than 5-7 years.
Balloon mortgages are amortized over a thirty year period, so the interest rate savings are real.
Balloon mortgages have a term of 3, 5, or 7 years.
You will be need to refinance before the end of the balloon term if you will be staying in the home.
|
