Mark Tiernan, 9 Things You Should Do Before Applying For A Balloon Mortgage<br><br><br><br> A balloon mortgage is a short-term mortgage that usually has only
about five to seven years. It works similar to a fixed rate mortgage
when you make monthly payments but at the end of the term, the final
payment is much larger than the other payments to pay off the balance
of the loan. <p>
That being the case, there are certain things you need to consider before applying for a balloon mortgage. </p><p>
1. What do you need to have in order to apply? Applying for balloon
mortgage is similar to regular mortgage and you'll probably be the same
documents and papers that you would for any other type of mortgage.
However, you should ask your lending institution with paperwork you'll
need to have available. </p><p>
2. what is the interest rate? Just like with any other mortgage to want
to know what the interest rate is. In a balloon mortgage it is usually
fixed for a certain amount of time. Sometimes it may carry a lower
interest rate for the first several years but this really depends on
the lender and you should get this information before you make any
commitment. </p><p>
3. When does the balance become too? In a balloon mortgage you pay part
of the amount borrowed in equal installments, but the last payment can
be a doozy and you are obligated to pay the entire balance. Therefore,
no wait when this is going to crop up is important so that you can
either have other financial arrangements waiting in the wings or start
saving your pennies for that fateful day. </p><p>
4. Is there a refinance options? Since most people won't have the money
to pay the balloon payment in one lump sum, it's prudent to ask if
there are refinance options with the loan so when it becomes due you
can refinance and come up with a new payment arrangement. </p><p>
5. Can you lose the refinance option? Sometimes a refinance option
comes with a set of conditions one of which is prompt payment. Find out
what kinds of things can make you lose the refinance option so you can
follow the guidelines in order to keep this option open at the end of
the loan. </p><p>
6. Would you have to qualify to refinance? Refinancing is a privilege
offered to some people with the balloon mortgage and some lending
institutions will want to reassess your ability to pay. Find out if you
will be required to go through some sort of an evaluation and pass and
signed documents began when you refinance. </p><p>
7. Can you pay the loan? before entering into any kind of loan
agreement you want to look at your lifestyle, expenditures and
financial commitments and figure out if you really can afford to pay
not only the payments but the lump sum at the end. </p><p>
8. What is the worst case? Before entering into a balloon mortgage
agreement you want to be prepared for anything unexpected and when your
worst-case scenarios. What if you lose your job? You want to think
about your own financial situation as well as the economic situation of
the country. </p><p>
9. What does someone else think? When you're trying to get a mortgage,
you might be too close to the situation to make an impartial judgment.
It's not a bad idea to solicit the advice of a professional finance
expert to see if this is the right thing for you to do. </p><p>
If you've gone through all the steps and answered all the questions
above to your satisfaction, then you'll know if a balloon mortgage is
right for you. </p><p>
</p><p>
Lee Dobbins writes for where you can learn about all aspects of moving including getting a mortgage. </p><br>