Data Mortgage Programs - Balloon Mortgage

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Balloon Mortgages

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About Balloon Mortgages

A balloon mortgage has a lower rate and lower monthly payments than a fixed-rate mortgage. Like an ARM, a balloon loan can help you either save money each month or borrow more for your home purchase.

Monthly payments on a balloon loan are fixed for the five- or seven-year loan term. A final “balloon” payment for the entire remaining balance is due at the end of the term.

A balloon mortgage is a good option if you:

You plan to stay in your home only for five to seven years
Don’t expect rates to rise significantly before the loan matures
Expect to have the money to make the final payment at the balloon date
Want predictable monthly payments

Balloon Mortgage Product Types:

5 Year Balloon.
7 Year Balloon.

Balloon Mortgage Comparison

Program Advantages	Program Disadvantages
Lower initial monthly payment. Lower payment over a shorter period of time. Many balloon mortgages offer the option to convert to a new loan after the initial term.	Risk of rates being higher at the end of the initial fixed period. Risk of foreclosure if you cannot make balloon payment or if you cannot refinance or if you cannot exercise the conversion option.

Terms and conditions apply. Some programs may not be available in all states and they may change without notice. State restrictions and limitations may apply. This is for educational purposes only. Contact your Data Mortgage Reverse Mortgage loan representative for complete details.

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