Balloon Mortage Loans

Short Term Mortgages

Balloon mortgages are short term mortgages that normally mature in 5 to 7 years. After the maturity period the loan must be paid in full. Often interest rates offered on balloon loans are lower than conventional 30 year mortgages.

Short term mortgages such as the balloon loan are suitable for home buyers that plan on living in thier home only a short time. If you still own your home at the end of the maturity period you should be able to refinance your home at the then current rates.

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Home Buying Vocabulary

LIBOR

Short for London Interbank Offered Rate, and are benchmark interest rates for many adjustable rate mortgages, business loans, and financial instruments traded on global financial markets.

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Frequently Asked Question

Is it worth refinancing even if my rate will only be reduced by a little bit?

Answer:
Yes, as long as you keep your home long enough to where the money saved on interest more than makes up for the money spent on closing costs.

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