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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).
Finding a Mortgage Loan with Bad Credit
If you have bad credit, you might think that you ll never be able to find a lender willing to offer you a loan for some of the better things in life... especially high-value loans such as a mortgage loan to buy the house of your dreams. You ll be relieved to know, however, that a variety of lenders are more than willing to offer mortgage loans to individuals of all credit levels.
Here is a little bit of advice on how to begin your search for a mortgage lender who s willing to make a loan offer to individuals with bad credit, as well as a few tips on how to shop around and find the best in ..
* 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.
Mortgage Loan Information - Know The Basics When You Refinance Or Purchase A Home
If you are currently looking for a new home, chances are that in all the excitement you wont really give any thought to the type of home loan mortgage you take out, instead going with the first one offered to you. This could be a serious mistake costing you thousands, if not tens of thousands. Make sure you know all about the different types of home mortgage loans before you starting looking for that new dream home!
Here are some of the basic types of mortgage loans:
Fixed-rate home loan mortgage -
As the name suggests, this is a plain-vanilla home loan. Basically you borrow a certain ..
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 choosing a balloon loan, and be sure to have a plan in place for when the loan terms ends. Always seek the advice of a qualified mortgage professional.
* Copyright 2006, Brandon Cornett.
About the Author:
Brandon Cornett is the editor of http://HomeBuyingInstitute.com" target="_blank"> http://HomeBuyingInstitute.com, one of the Internet's largest libraries of home buying information -- over 100 expert articles on home buying and home mortgage loans! Learn more at: http://www.homebuyinginstitute.com" target="_blank"> http://www.homebuyinginstitute.com
Source: http://www.isnare.com Brandon CornettMortgage Loans 101: What's A Balloon Loan?
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