A balloon mortgage has an interest rate that is fixed for an initial amount of time. At the end of the term, the remaining principal balance is due. At this time, the borrower has a choice to either refinance or pay off the remaining balance.
There are no penalties to paying off a balloon mortgage loan before it is due. Borrowers may refinance at any time during the life of the loan.
Balloon loans typically have either 5 or 7-year terms. For example, a 7-year balloon mortgage with an interest rate of 7.5% would feature this interest rate for the entire term. After 7 years, the remaining loan balance would become due.
Polaris Funding Group, LLC IS A MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER
Company NMLS: 2540
CO: 2540 ● CT: MB-2540 ● FL: MBR2409
GA: 2540 ● SC: 2540
201 S Biscayne Blvd 28th Floor
Miami, FL 33131
Phone: (800) 649-2420