Key Points of the Balloon Loan

• The interest rate on a balloon mortgage loan is almost always lower than the interest rate on a traditional 15- or 30-year mortgage loan. This is the primary benefit offered by this type of loan.
• The result of the lower interest rate, of course, is a lower overall monthly payment.
• Balloon mortgage loans usually have a term of five to seven years. After that, you must pay off the remaining balance in full (either by refinancing or paying out of pocket).
• Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loan
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  but then requires you to pay off the remaining balance in one lump-sum payment.

  Key Points of the Balloon Loan

  • The interest rate on a balloon mortgage loan is almost always lower than the interest rate on a traditional 15- or 30-year mortgage loan. This is the primary benefit offered by this type of loan.
  • The result of the lower interest rate, of course, is a lower overall monthly payment.
  • Balloon mortgage loans usually have a term of five to seven years. After that, you must pay off the remaining balance in full (either by refinancing or paying out of pocket).
  • Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loa
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    always lower than the interest rate on a traditional 15- or 30-year mortgage loan. This is the primary benefit offered by this type of loan.
  • The result of the lower interest rate, of course, is a lower overall monthly payment.
  • Balloon mortgage loans usually have a term of five to seven years. After that, you must pay off the remaining balance in full (either by refinancing or paying out of pocket).
  • Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loa
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    e, of course, is a lower overall monthly payment.
  • Balloon mortgage loans usually have a term of five to seven years. After that, you must pay off the remaining balance in full (either by refinancing or paying out of pocket).
  • Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loa
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    ther by refinancing or paying out of pocket).
  • Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loan will take on current interest rates at the time of conversion.
  • A balloon loan may be a good idea if you only plan to stay in a house for five to seven years. It can save you money each month, and if you sell the house before the term ends, you'll avoid the lump sum payment.

  Before deciding whether or not a balloon loan is right for you, you should educate yourself on all of the loan types. It's also a good idea to seek the advice of a qualified, reputable mortgage professional.

  Conclusion

  If you only plan to stay in a home for a few years, a balloon loan might be a good option for you. In most cases, a balloon loan will offer lower interest rates than a conventional, long-term loan. Educate yourself before