<\/span>Advantages of a Balloon Mortgage<\/span><\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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• If you are a homebuyer who expects to receive a windfall or are looking for a higher income within the next few years this loan could be for you.<\/li>
• If you are an individual who often relocates and not planning to stay in your newly acquired home for a long time then you can benefit from this kind of mortgage.<\/li>
• A balloon mortgage is beneficial for you if you are in a business and are looking at it as short term financing for your project without handing out collateral.<\/li>
• When you compare the eligibility requirement with the traditional loan it is easier for people to qualify for the balloon loan, which means many borrowers will have the chance to get their own home.<\/li>
• If a borrower takes out a balloon loan for $300,000 with a term of seven years and an interest rate of 4.5% with an amortization period of 30 years he will not be paying off the loan for that entire 30 years but will only make payment for seven years he would then be left with the balance of $262,598 after 84 months (7 years) of making payment, this will be the total amount that the borrower will have to pay as a lump sum payment for borrowers who are looking for low in fixed interest rates on their loan. This is a fitting financing scheme and also a type of mortgage that is comparatively shorter than most types of loans because the normal lasts for 5-7 years.<\/li><\/ul>

  To get the monthly payments on balloon loans, lenders usually divide the loan over a standard 30 years period but some lenders use other computation methods such as interest only.\u00a0<\/p>

  The borrower can request the lender for a reset so that it automatically recalculate the mortgage at the current interest rate, however, when no such option has been provided it can mean that the buyer will either sell or refinance the home before the end of the term.<\/p>

  This loan widens the eligibility stop of the loan because more people can now qualify to avail of financing.\u00a0<\/p>

  So for borrowers who may be low in cash at the moment but are expecting a huge amount to come within the next 5-7 years this alternative home financing scheme is very appropriate.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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  <\/span>Conclusion<\/span><\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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  The unique feature of a balloon mortgage is that it does not fully amortize over the life of the loan ideally the borrower will make a payment over a predetermined period of time usually five or seven years then at the end of the period, he pays for the full remaining balance of the loan at once.\u00a0<\/p>

  You can understand that the remaining balance would be huge hence the term balloon payment.\u00a0<\/p>

  However, looking at the current situation of the COVID-19 pandemic where many are out of employment it is a risky mortgage for homeowners and lenders.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

  About Balloon Mortgage Let us learn all about balloon mortgages, why to get them, the advantages and disadvantages of a balloon mortgage, and the things one should pay attention to before you make a decision.… Continue Reading What Is A Balloon Mortgage – The Pros And Cons<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":4437,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[38],"tags":[977,976,47,978,89,979,980],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.compareclosing.com\/blog\/wp-content\/uploads\/2021\/01\/What-Is-A-Balloon-Mortgage-The-Pros-And-Cons.jpg","_links":{"self":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/4426"}],"collection":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/comments?post=4426"}],"version-history":[{"count":5,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/4426\/revisions"}],"predecessor-version":[{"id":4457,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/4426\/revisions\/4457"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media\/4437"}],"wp:attachment":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media?parent=4426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/categories?post=4426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/tags?post=4426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}