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 Washington Public, Private and Charter Schools: Compare them using these top-rated, comprehensive reports.   Schools in Tri-Cities, Richland, Kennewick and Pasco

Pricing >Sellers Beware Here is a scenario for sellers to avoid. You contact a real estate agent to list your home and the agent suggests that you might get more for your house than comparable homes on the market. The agent assures you that it only takes finding one person who is willing to pay your price! Some agents approach a listing appointment as if they are bidding for your home. The unfortunate result is that you start out with an unrealistic opinion of your home's value. There is often a strong temptation to work with a person who says what you want to hear. An experienced, reputable real estate agent will back up their opinion of your home's value with hard data. The agent should give you information about the listing price of homes that are currently on the market, and recent selling prices of similar properties in your immediate area. Even the most heroic marketing efforts won't work on a property that is obviously overpriced, (except in the most exaggerated of seller's markets.) Even if you find a buyer who is willing to pay more than your home is worth, the sale could fall apart when the appraisal comes in lower than the agreed-upon price. Listen to everything, but be careful! See All Tips In The "Pricing" Category > See Complete Library Of Hundreds Of Tips In 30+ Categories >

Q  What does the abbreviation PITI stand for? A  Principal, Interest, Taxes and Insurance are the four major items included in a monthly mortgage payment. See More Real Estate Trivia >

Laura Harris-Hodges Coldwell Banker Tomlinson Associated Brokers 8836 Gage Blvd Ste 101-B Kennewick WA 99336 509-737-3092 Fax: 509-783-5826 lharris@cbtabs.com Buying and selling a home is serious business ... after all, for most of us, it is the most important investment we possess. When it comes to selecting a professional, you want a person with the knowledge, characteristics, and resources necessary to best look after your interests. With over 17 years of real estate experience, Laura goes the extra mile for all of her clients. That’s why she constantly researches the market and property values to insure that you achieve your goals. Laura is ranked in the top 1% of all Coldwell Banker agents nationally and is a Seniors Real Estate Specialist (SRES), Certified Residential Specialist (CRS) and Tri-Cities Home Construction Specialist. From selling to purchasing or building your new home, you won't find a harder working professional to handle all of your real estate needs. Laura Harris-Hodges “Making A Difference For You” www.tri-citieshomesearch.com is brought to you by Laura Harris-Hodges NUMBER1EXPERT in real estate for Tri-Cities, Richland, Kennewick and Pasco, Washington Read Laura Harris-Hodges' 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.