Hablamos Español    Let's Connect

Balloon Mortgages

What are balloon mortgages?

A balloon mortgage has an interest rate that is fixed for an initial amount of time. At the end of the term, the remaining principal balance is due. At this time, the borrower has a choice to either refinance or pay off the remaining balance.

There are no penalties to paying off a balloon mortgage loan before it is due. Borrowers may refinance at any time during the life of the loan.

Balloon loans typically have either 5 or 7-year terms. For example, a 7-year balloon mortgage with an interest rate of 7.5% would feature this interest rate for the entire term. After 7 years, the remaining loan balance would become due.

More Details on Balloon Mortgages

Balloon mortgages should come with a lower interest rate than either fixed-rate or adjustable-rate mortgages, making them a cheaper loan for the right consumers.

Those consumers who plan to live in a home for only a short period of time might do well to take out a balloon mortgage. Say they plan to move in three years. They can take out a five-year balloon mortgage at a lower interest rate and then sell their home long before that massive balloon payment becomes due.

This can also be an option for people who get large bonuses but a more moderate salary. A balloon loan would allow the monthly mortgage payments to fit into their budget, and then they could use the larger yearly lump sums toward the balloon payment.

This mortgage is known as the entrepreneur mortgage or executive mortgage.  The flexibility to fit a financial plan is unparalleled.  However, this is not a product you can just pick.  Nor do you walk into a bank and ask for a balloon mortgage.  It takes an astute mortgage professional to put together a mortgage on your behalf, so you see the real benefits.

These are two ways this smart money mortgage makes sense.  However, there are so many more.  There is a unique qualifying process for this service.  Please do not fill out an application, by appointment only.

Click on the link below to schedule a 10-minute overview and see if you qualify for this exclusive mortgage model.

After getting your loan and purchase your home, you will continue to be supported and educated by us on how to manage your mortgage. We offer this so you have expert guidance at all times.
Contact us any time with questions!