Ballon Mortgage Rates

A fixed rate mortgage means that your interest rate never changes. (That said, if the size of the down payment is a concern, you probably should not be taking out a jumbo mortgage.) A balloon.

10 1 Arm Interest Rates 10/1 ARM – the rate is fixed for a period of 10 years after which in the 11th year the loan becomes an adjustable rate mortgage (ARM). The adjustable rate is tied to the 1-year treasury index and is added to a pre-determined margin (usually between 2.25-3.0%) to arrive at your new monthly rate.

Balloon mortgages are typically used for transactions where a borrower does not intend to hold onto the property for a long period of time. Karen Lawson, writing for SFGate, says the mortgage rates.

It is a mortgage in which the entire unpaid principal becomes due and payable on a given date, five, ten, or any number of years in the future. The borrower must pay up, refinance, or lose the.

Of greater concern, however, is that balloon feature. Your interest rate is fixed at 4.25 percent for. penalty equal to 3 percent of the outstanding balance. Scott Lugar, head of home sales and.

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For example, with a five-year balloon mortgage, a homeowner would make five years of monthly payments at a set rate of interest and then, at the end of the five years, either pay off the rest of.

The alternative is to opt for a balloon payment that will. said Rob McLister, founder of rates-comparisons site.

You love the condo for its deck and patio. Still, because your company has put you on notice that it plans to move you to Omaha in three or four years, you take a balloon mortgage at a low interest.

When the term expires, the homeowner faces a number of decisions. For example, with a five-year balloon mortgage, a homeowner would make five years of monthly payments at a set rate of interest and.

IngDirect (Stock Quote: ING), for example, offers a five-year Easy Orange balloon mortgage that carries a fixed rate of 4.25 % for the first 60 months. After that, the entire loan balance is due in an.

The advantage of this loan is a lower mortgage rate and payment. If, for example, 30-year fixed rates are 4.00 percent, a five year balloon mortgage might have an interest rate of 2.5 percent. For a $200,000 home loan, the 30-year loan payment would be $955, while the balloon mortgage payment would be $790.

A balloon mortgage is one on which the outstanding balance is due at some point before amortization has paid off the balance in full. Aside from the repayment obligation, balloon loans are identical.