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.
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Company NMLS: 1692428
www.nmlsconsumeraccess.org
VanLeeuwen, Pye & Associates, Inc. NMLS #23742 CAL DRE#010865 Courtland Young CAL DRE#01468400 NMLS#1682428
4627 Antioch Place
San Diego, CA. 92115
Phone: (858) 337-6317
Court@courtlandYoung.com
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