A balloon mortgage is a loan where the total amount comes due in less time than the loan term.For example, a loan can be "30 due in 15". This means that the loan payment is calculated as if the loan were for 30 years. The entire loan must be repaid after 15 years.The longer a loan's term is the lower its payment is.A 30 year loan has a lower monthly payment than a loan amount for a similar loan amount that is due in 15 years.The reason in this case for offering this is that it offers a lower payment over the 15 years because the loan is being repaid at the 30 year rate.These types of loans are often offered to borrowers as second loans.Although the loan is due in 15 years most borrowers do not keep the property or the mortgage long enough for the full loan amount to come due.An example of a balloon payment is as follows:Loan amount: $375,000Annual interest rate: 6.50%Loan payment term in years: 30Year of balloon payment: 15Monthly payment: $2,370Total monthly payments over time: $426,646Balloon payment: $272,097Total interest payments: $323,743Total payments made: $698,743As stated earlier, in many cases a loan is refinanced before the full amount is due.Get Mortgage Rates, 25+ Free Mortgage Calculators, Mortgage Quick Tips and Much MoreSubscribe to our free Mortgage and Real Estate RSS Feed - Great Free Content For Your WebsiteArcher Pacific's website has vast mortgage resources. There is a lot of useful content that can be used by other websites. The 25+ Mortgage Calculators will help you figure out any mortgage scenario. Get smart tips on saving on your refinance or real estate purchase. Get fresh daily content to republish on your website through our free RSS feed. There are guides to debt consolidation, bad credit issues, choosing a realtor, understanding minimum payment options, adjustable rate mortgages, 40 year loans, 50 year loans, and much more.Email us your mortgage related questions for a quick answer.Republish our mortgage calculators on your site for even better content.Visit http://www.archerpacific.com to answer all of your mortgage questions!
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