North Carolina is known for its beautiful beach homes, historic estates, modern single-family homes and stylish condominiums. Mortgages are a preferred way of buying home in North Carolina. People who require raising some money against their houses may also opt for getting a mortgage. There are many types of mortgages that the borrowers can choose from, such as fixed rate mortgages, adjustable rate mortgages, balloon mortgages and sub-prime mortgages.
Balloon mortgage loans usually offer a lower interest rate than the prevailing rate for a fixed term initially. After this term is over, borrowers are required to repay the full amount of the mortgage in one single payment. This single final payment is termed as balloon payment. Balloon mortgages are short-term loans, with fixed interest rates for fixed monthly payments. The monthly payments are usually calculated on the basis of a thirty-year repayment mortgage plan. The terms for balloon mortgages can be three, five or seven years. After the end of the chosen term, the full repayment of the balance of the mortgage must be made in lump sum.
The major advantage of balloon mortgage is that the interest rate offered is usually the lowest possible in the market. This means lower monthly payments for borrowers. However, the biggest drawback associated with this type of mortgage is that, the final payment turns out to be a big amount, for which borrowers might have to take a refinancing option.
Borrowers can take the balloon loan, with the refinance option and can have the outstanding amount, converted into a fixed rate mortgage. To obtain the refinance option, there is no need for requalification of the borrower or reapproval of the property. The interest rate offered for this new loan will be same as the current market rate. The lender might charge a small processing fee to convert the final amount into a fixed rate mortgage loan.
Balloon loans are ideal for borrowers looking for an initial lower rate and are willing to take the risk of taking a fixed mortgage rate a few years later.
Related Articles of Interest :
-
New York Balloon Mortgages
10 August 2010 8:30 PM |
No Comments
Homeowners in New York usually have a mortgage on their houses as to buy a house in New York is an expensive affair. People who require raising some money against their houses may purchase a mortgage. There are many types of mortgages that the borrowers...
-
North Carolina Adjustable Rate Mortgages
10 August 2010 8:30 PM |
No Comments
Many people want to buy houses in North Carolina right now, as the real estate market is very good. Prospective homebuyers can choose from a range of luxurious as well as affordable houses in various settings of North Carolina. People who want to buy a...
-
North Carolina Mortgage Payments
10 August 2010 8:30 PM |
No Comments
Mortgage payments are payments borrowers must make periodically, per the schedule set up by their lenders. There are many mortgage payment options available for borrowers in North Carolina. They can choose from bi-weekly, bi-monthly, or regular monthly payment options. Bi-weekly payments allow the borrowers to...
-
New Jersey Interest Only Mortgages
10 August 2010 8:30 PM |
No Comments
New Jersey real estate market has picked up lately due to various reasons. Mortgage rates are applied to the principal mortgage amount at which, a loan is provided to the borrowers at a fixed or adjustable rate. These rates are decided by the mortgage company...
-
Fixed Mortgage Interest Rates
10 August 2010 8:30 PM |
No Comments
Mortgages may be either fixed rate mortgages (FRM) or adjustable rate mortgages (ARM). In the case of fixed rate mortgages, the interest payments remain constant during the whole term of the loan. In adjustable rate mortgages the interest payments change in relation to the bank...
-
New York Adjustable Rate Mortgages
10 August 2010 8:30 PM |
No Comments
Most of the people in New York prefer to rent their houses or apartments instead of buying one, as the real estate market is tough in the state, and houses can be very expensive. New Yorkers who want to buy a house and who wish...
-
Adjustable Rate Mortgages
10 August 2010 8:30 PM |
No Comments
If you are shopping around for a mortgage, you may want to take a look at adjustable rate mortgages. Most people believe that fixed-rate mortgages are best because the interest rate never changes for the entire length of the mortgage. With adjustable rate mortgages, the...
-
Dallas Interest-Only Mortgages
10 August 2010 8:30 PM |
No Comments
You are buying the home of your dreams with an “interest-only mortgage!” You’ll get a low mortgage payment, and you’ll maximize your tax deduction, all on your current income! Everything seems to be going good. But have you actually understood the notion of interest-only mortgage...
-
Current Mortgage Interest Rates
10 August 2010 8:30 PM |
No Comments
A mortgage is a loan that is paid back over a set period of time. Taking a mortgage therefore involves paying a certain amount as interest in addition to the principal borrowed. Mortgages can be broadly classified into two types based on the interest rates....
-
Atlanta Interest Only Mortgages
10 August 2010 8:30 PM |
No Comments
Nearly half of the home mortgages in Atlanta are interest-only mortgages. Owing to the price appreciations of homes being much higher than the appreciations in wages in Atlanta and worldwide, people generally search for options to compensate. In such a situation, Atlanta banks came forward...