Home Loan Balloon Mortgage In North Carolina


North Carolina the magnificent state in United States is well known for its beautiful beach homes, modern single family homes, historic estates and stylish condominiums. Mortgage is the most preferred way of purchasing a home in North Carolina and those people who need to raise some money against their house can also choose to apply for a mortgage. There are different types of mortgages available in North Carolina and the borrower has a wide choice to choose from mortgages like adjustable rate mortgages, fixed rate mortgages, sub-prime mortgages and balloon mortgages; they are all affected by your FICO score

Balloon Mortgages

North Carolina balloon mortgages would generally offer you a lower interest rate rather than the prevailing rates of the initial fixed term mortgage. After the expiry of this term the borrower is required to repay the entire amount of the mortgage in just a single payment. This single and large payment is basically termed as the balloon payment. Therefore there are balloon mortgages which are basically short term loans that have fixed interest rates and also a fixed monthly payment system.

The monthly payments for these balloon mortgages are generally calculated on the basis of a thirty year mortgage repayment plan. On the other hand the terms for this balloon mortgages can be anywhere from 3, 5 or 7 years. After the chosen term has ended the entire repayment of the balance of the remaining mortgage should be made in a lump sum.

Choosing of Balloon Mortgages

There are several advantage of availing balloon mortgages and the best advantage is of this mortgage is that the rate of interest which is offered is generally the lowest rate in the market. This means that the borrower can enjoy lower monthly payments for the mortgage loan. However there are also a few drawbacks in availing these balloon mortgages as the final payment of the mortgage generally turns out to be a very large amount, and for this large amount the borrower might even have to decide for a refinancing option.

However these balloon mortgages are the best options to real estate investors and those trying to sell a property after purchasing a new one. There is also risk involved in this type of mortgage as if you are not unable to sell or refinance your mortgage when the balloon payment is due you can even loose your house.

Reset or Conversion Options

If you prefer applying for North Carolina balloon mortgages then there are two ways you can minimize the involved risks. There are Reset and conversion options which let you change the terms of the mortgage when your balloon payment is near. However this option might result in finance charges and higher interest rates.

The borrowers should opt for balloon mortgages but with the refinance option as it would let you have outstanding amount which can be converted to fixed rate mortgage. In order to obtain this refinance option there is not need for any re-approval of property or re-qualification of the borrower. The interest rates that are offered for this new loan should be assumed to be the same as the current market rate. However the lender might also charge a small amount of fee for converting your final amount into fixed rate mortgage loan.

It is important you know that the procedure followed to avail the loan is the same throughout the country and these balloon mortgages can be availed in every city of North Carolina like Raleigh, Concord, Gastonia, Asheville, Fayetteville, Jacksonville, Rocky Mount, Wilmington, Charlotte and Winston-Salem. These balloon mortgages should be mainly applied for by those borrowers who are looking for some initial lower rate and are also ready to take up the risk of taking fixed mortgage rate after a few years.

If you are in the market for an Alabama mortgage loan or a North Carolina mortgage loan or a home loan in any part of the country find out if an ARM mortgage or a fixed rate mortgage is right for your financial situation



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