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"Everything we asked for Nancy attended to."
"Nancy gave us outstanding personal service and help in purchasing our Breckenridge condominium."
Dr. Lou and Micki Montanio
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Welcome > Resources > Mortgage Calculators >
Balloon Mortgages ...
Are Balloon Mortgages For You?
A balloon mortgage can be an excellent option for many home buyers. A balloon mortgage is usually rather short, with a term of five to seven years, but the payment is based on a term of 30 years. They often have a lower interest rate, and can be easier to qualify for than a traditional 30 year fixed mortgage. There is, however, a risk to consider. At the end of your loan term you will need to pay off your outstanding balance. This usually means you must refinance, sell your home or convert the balloon mortgage to a traditional mortgage at the current interest rates.
Definitions
- Mortgage amount
- Original or expected balance for your mortgage.
- Interest rate
- Annual interest rate for this mortgage.
- Term in years
- The number of years over which you will repay this loan. The most common balloon mortgage terms are 5 years and 7 years. After the mortgage term is complete, you will then need to refinance or pay off the remaining balance.
- Monthly payment
- Monthly principal and interest payment (PI). The monthly payment is calculated using a 30 year term.
- Total payments
- Total of all monthly payments over the term of the balloon mortgage. This total payment amount assumes that there are no prepayments of principal.
- Total interest
- Total of all interest paid over the term of the balloon mortgage. This total interest amount assumes that there are no prepayments of principal.
- Prepayment type
- The frequency of prepayment. The options are: none, monthly, yearly, and one-time payment.
- Prepayment amount
- Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.
- Start with payment
- This is the payment number that your prepayments will begin with. For a one time payment, this is the payment number that the single prepayment will be included in. All prepayments of principal are assumed to be received by your lender in time to be included in the following month's interest calculation.
- Savings
- Total amount of interest you will save by prepaying your mortgage.
The mortgage calculators are provided by KJE Computer Solutions, LLC and made available to NUMBER1EXPERT as self-help tools for your independent use and are not intended to provide investment advice. We can't guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
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Buyers Remorse >What Can Go Wrong
Real estate transactions are very complex, and difficulties can arise. One common form of interference can come in the innocent guise of helpful advice from family and friends.
When you buy your first home, you want the best advice you can get. You want to show the house to friends and relatives before you commit. They will probably tell you about all of the things that went wrong during their own transactions so you can avoid the same mistakes. These people all have good intentions, but too much advice can put you into a state of high anxiety.
If you are buying your home with the help of a professional real estate agent, your agent will know how to make sure that any minor upsets do not turn into major problems. A real estate agent's expertise is based on formal training and experience in many real estate transactions. Their reputation is on the line with each sale, so they are highly motivated to make your purchase or sale go as smoothly as possible. When you are dealing with a professional real estate agent, you can worry about what might go wrong if you wish, but you don't have to!
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| Q |
What Newport, Rhode Island mansion was built as a birthday present and incorporates 500,000 cubic feet of white marble?
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| A |
The Vanderbilt Marble House was constructed by railroad baron William K. Vanderbilt for his wife Alva, who later divorced him, remarried and moved into a mansion down the street. |
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- NUMBER1EXPERT 
