Mortgage Advice

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Mortgage Disclosure

Balloon Loans

• Before You Apply

What to do to prepare up to a year in

advance of your mortgage application.

• Can You Trust Your Loan Officer?

Who does your loan officer work for,

and how do you find the best one?

• Lender, Broker, or Bank?

What type of loan Provider is right for

you?

• Types of Mortgage Loans

The types of mortgage loans and

their advantages and disadvantages.

• Types of Documentation

Your options for disclosing how much

you make and where it comes from.

• Underwriting

What does an underwriter look for

when analyzing your loan application?

• Pre-Approval

What it is and isn't and how it saves you

time and heartache.

• Credit

What it is, and how it affects your life.

• Income & Employment

How much you need to make and for

how long in order to qualify.

• Assets/ Down Payments

How much, where from, and what kind

of money will work.

• Down Payment Assistance

Short on funds? Learn about your

options and explore these resources.

• Processing

What happens to your application after

you sign it and before you close?

• Title

What is it, what does it mean, and how

does it work?

• Appraisals

What is your home worth, why you

should bother to find out, and how

does it affect your loan?

• Alternate Financing

Facing rejection? Time to get creative.

• FHA

Low down payment, forgiving

qualifications. A great loan option.

Balloon loans

Balloon loans are short-term fixed rate loans that have fixed

monthly payments based usually upon a 30-year fully

amortizing schedule and a lump sum payment at the end of its

term. Usually they have terms of 3, 5, and 7 years.

The advantage of this type of loan is that the interest rate on

balloon loans is generally lower than 30- and 15- year

mortgages resulting in lower monthly payments. The

disadvantage is that at the end of the term you will have to

come up with a lump sum to pay off your lender, either

through a refinance or from your own savings.

Balloon loans with refinancing option allow borrowers to

convert the mortgage at the end of the balloon period to a

fixed rate loan -- based upon the outstanding principal balance

-- if certain conditions are met. If you refinance the loan at

maturity you need not be requalified, nor the property

reapproved. The interest rate on the new loan is a current rate

at the time of conversion. There might be a minimal

processing fee to obtain the new loan. The most popular terms

are 5/25 Balloon, and 7/23 Balloon.