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Refinance balloon mortgage before balloon payment is due

When I bought my home, I expected to be retiring within seven years and relocating to Florida. As a result, I chose a balloon mortgage option for a low payment and interest rate for seven years, with a large balloon payment due at the end of that period.

I am a year away from when the balloon payment kicks in, but my circumstances have dramatically changed and relocating is no longer an option at this time. As a result, I need to refinance my balloon mortgage in the next few months to avoid the huge payment that is otherwise due.

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Understanding which type of mortgage is right for you

There are several different types of home loans available to consumers today. There are fixed rate and adjustable mortgages along with balloon mortgages. An educated home buyer will understand which mortgage is the right loan type for them. Each person should carefully consider their situation in order to make the right decision.

A fixed rate mortgage is the most common type of home loan on the market today. The interest rate is fixed, which means it will not change during the loan term. The length of the loan term can be either 10, 15, 20, or 30 years. The 30 year fixed rate mortgage is the most popular choice because it provides a low payment that will not change over the life of the loan. Some people prefer the fifteen year fixed rate because it will save a lot of money in interest payments, although the monthly payment will be higher.

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Assuming a mortgage loan

Very few mortgage loans are assumable and yet people still try to assume them either by breaking the rules outright or finding ways to go around them. To be able to understand more of assuming mortgage loans, I have prepared this discussion on the ways to assume mortgage loans and some ways people go around mortgage loan restrictions.

More often than not, it is the buyers of a property that is subject to the loan that are eager to assume the mortgage loan. Strictly speaking, assuming mortgage loan means that a person, usually the buyer of the property, takes it upon himself to pay the mortgage loan either with just the consent and agreement of the original mortgagor (usually the seller of the house) or with the consent of the both the mortgagor and the mortgagee( the lender).

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