Balloon Mortgages

Finding the right mortgage for you can be a difficult process to go through, and sometimes it can feel like you're reading the same fine print over and over again. But one of the more unusual types of mortgage is the balloon mortgage, so called because of the large balance due upon the loan's maturation. That is, the payments you make on the mortgage loan do not fully pay of the debt, leaving a balance that you must pay in a lump sum. Because of its large size, this sum is called a balloon payment.

If you have questions about your mortgage, contact the Maryland mortgage modification attorneys of Chaifetz & Coyle, P.C., by calling 443-546-4608.

Understanding Balloon Mortgages

Balloon mortgages come in different sizes, the most common being a 7-year mortgage and 15-year mortgage. The mortgage begins with a fixed or floating interest rate, and upon maturation, leaves a large sum remaining on the loan, which must then be paid off immediately. If you cannot make this payment, the mortgage can be restructured in a “reset option.”

Balloon mortgages are best if you aren't planning on owning the property for very long. You could take a balloon mortgage if you are planning on moving in a few years, then sell the home and use the money made on the sale to pay off the rest of the mortgage loan. The downside is that many people find it difficult to pay off much of the loan in only seven years, and then find that the large balloon payment is difficult to make.

Contact Us

If you have a balloon payment mortgage and are having trouble making the payments on it, contact the Maryland mortgage modification attorneys of Chaifetz & Coyle, P.C., by calling 443-546-4608.