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  • When to use Balloon Loan Is Far Better Than Conventional Loan

    March 4, 2016
  • A balloon mortgage is a short term loan, which unlike a regular mortgage, isn't paid off entirely in monthly payments. Instead, you are left with a portion of the principal amount, which then has to be paid off in a lump sum. This outstanding amount is also sometimes known as a balloon payment. Most balloon mortgages sometimes called bullet loans have a term of between five and seven years, although 15-year terms have also become more popular in the last few years.

    Qualifying for a balloon mortgage may be easier than qualifying for all other types of mortgages, making it easier for many people to be homeowners. The application process for a balloon loan, a conventional loan is much the same as for any other type of mortgage. You will still need to qualify as far as credit and income are concerned. Make sure you understand the options for refinancing at the end of the loan and make sure you verify with your lender that there is no possibility of losing that option.