Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter


redhotloantips fat loss

Mortgage Loans 101: What's a Balloon Loan?

Written by: Brandon Cornett

When buying a home and evaluating your mortgage loan options, you'll likely encounter the term "balloon loan." This type of loan allows you to make fixed payments for a certain period of time, but then requires you to pay off the remaining balance in one lump-sum payment.

Key Points of the Balloon Loan

* The interest rate on a balloon mortgage loan is almost always lower than the interest rate on a traditional 15- or 30-year mortgage loan. This is the primary benefit offered by this type of loan.

* The result of the lower interest rate, of course, is a lower overall monthly payment.

* Balloon mortgage loans usually have a term of five to seven years. After that, you must pay off the remaining balance in full (either by refinancing or paying out of pocket).

* Some balloon loans can be converted to a fixed-rate mortgage loan at the end of the original term. In such cases, the fixed-rate loan will take on current interest rates at the time of conversion.

* A balloon loan may be a good idea if you only plan to stay in a house for five to seven years. It can save you money each month, and if you sell the house before the term ends, you'll avoid the lump sum payment.

Before deciding whether or not a balloon loan is right for you, you should educate yourself on all of the loan types. It's also a good idea to seek the advice of a qualified, reputable mortgage professional.


If you only plan to stay in a home for a few years, a balloon loan might be a good option for you. In most cases, a balloon loan will offer lower interest rates than a conventional, long-term loan. Educate yourself before choosing a balloon loan, and be sure to have a plan in place for when the loan terms ends. Always seek the advice of a qualified mortgage professional.

* Copyright 2006, Brandon Cornett. You may republish this article in its entirety, provided you keep the byline, author's note and website hyperlink intact.

About the author:

Brandon Cornett is the editor of HomeBuyingInstitute.com, one of the Internet's largest libraries of home buying information -- over 100 expert articles on home buying and home mortgage loans! Learn more at: http://www.homebuyingin stitute.com

Other Related Articles:

Finding a Home Loan with Bad Credit
Finding a home loan that is affordable when you have bed credit can seem nearly impossible and can be very frustrating. However, there are lenders out there who will approve your home loan regardless of your credit history. Yes, there will be some...read more

The other faces of Loans
People often perceive loan as a negative thing. To be in debt is seen as not only having no money but also a desperate attempt to have money. What people do not realize is that owing somebody money is not necessarily a bad thing. It is what...read more

Getting a car with a UK Secured Loan
People need wheels. Itís a fact of life, just like taxes! We need a car to get back and forth to work so we can earn a living to put food on the table and a roof over our heads. Itís a vicious circleÖ and itís all dependent on a car. Do you have...read more

Return to Home


Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map