Balloon Mortgages: The Pros and Cons
AuthorReal Estate Experts. Date:
When it comes to mortgages, there are a lot of options to choose from. One popular option for home buyers is the balloon mortgage. This type of mortgage offers a low-interest rate for a set period of time – usually 5, 7, or 10 years. After that period expires, the remaining balance on the mortgage becomes due and payable in one lump sum, known as a balloon payment. For many home buyers, a balloon mortgage can be an attractive option because it offers lower monthly payments during the initial stages of homeownership. However, buyers should be aware of some risks associated with this type of mortgage before signing on the dotted line. What is a Balloon Mortgage and How Does it Work? As we mentioned, a balloon mortgage is a home loan that requires a lump-sum payment at the end of the loan term. The monthly payments are typically lower … Continued
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