Welcome > Resources > Mortgage Calculators > Balloon Mortgages ...

Are Balloon Mortgages For You?

A balloon mortgage can be an excellent option for many home buyers. A balloon mortgage is usually rather short, with a term of five to seven years, but the payment is based on a term of 30 years. They often have a lower interest rate, and can be easier to qualify for than a traditional 30 year fixed mortgage. There is, however, a risk to consider. At the end of your loan term you will need to pay off your outstanding balance. This usually means you must refinance, sell your home or convert the balloon mortgage to a traditional mortgage at the current interest rates.

Definitions

Mortgage amount

Original or expected balance for your mortgage.

Interest rate

Annual interest rate for this mortgage.

Term in years

The number of years over which you will repay this loan. The most common balloon mortgage terms are 5 years and 7 years. After the mortgage term is complete, you will then need to refinance or pay off the remaining balance.

Monthly payment

Monthly principal and interest payment (PI). The monthly payment is calculated using a 30 year term.

Total payments

Total of all monthly payments over the term of the balloon mortgage. This total payment amount assumes that there are no prepayments of principal.

Total interest

Total of all interest paid over the term of the balloon mortgage. This total interest amount assumes that there are no prepayments of principal.

Prepayment type

The frequency of prepayment. The options are: none, monthly, yearly, and one-time payment.

Prepayment amount

Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.

Start with payment

This is the payment number that your prepayments will begin with. For a one time payment, this is the payment number that the single prepayment will be included in. All prepayments of principal are assumed to be received by your lender in time to be included in the following month's interest calculation.

Savings

Total amount of interest you will save by prepaying your mortgage.

The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

"A model of how the Internet can facilitate the process of deciding where to send your children to school" - America's Best School Profiles by The Heritage Foundation South Carolina Public, Private and Charter Schools: Compare them using these top-rated, comprehensive reports.   Schools in Edisto Beach and Walterboro

Financing Your Home >When Interest Rates Rise Many people fall out of the home buying market when interest rates start to go up. This is often a mistake. Many of the best mortgages deals become available when lenders are competing for new business and sellers are competing within a smaller buyer pool. You just have to know how to keep the costs down in order to counter the higher interest rates. One of the best tricks is the buy-down. In a buy-down, a fee is paid at the closing to get a lower interest rate. In a soft market, an anxious seller may be lured into to paying all or part of the buy-down. Another approach is to get the seller to pay some of closing costs, thus lowering the amount of cash a buyer needs to close. Frequently the seller's costs can be used as a write-off by the buyer. Always consult with your tax advisor if you are considering such an arrangement. If the market is softening due to rising or higher rates, the price itself becomes an area where a buyer may be able to save a lot of money on a house through skillful negotiating. Lower prices mean lower loan amounts, so don't be discouraged by higher rates--use them to your advantage. See All Tips In The "Financing Your Home" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  Into what category do forty-four percent of home buying households fall? A  Forty-four percent of home-buying households are made up of married couples with dependents. See More Real Estate Trivia >

The Jill Moylan Team Home Advantage Realty 303 Palmetto Blvd Edisto Beach and Walterboro, SC 29438 803-608-4663 moylanjill@NUMBER1EXPERT.com www.EdistoHomesforSale.com is brought to you by The Jill Moylan Team NUMBER1EXPERT™ in real estate for Edisto Beach and Walterboro, South Carolina Read The Jill Moylan Team's Privacy Guarantee, Terms of Service, and Free & Without Obligation Pledge

NUMBER1EXPERT™
© Best Image Marketing and/or its clients.
All rights reserved. All information deemed reliable but not guaranteed.