Why would I want a Balloon ARM Mortgage
The Balloon ARM is useful because its payment schedule is very different compared to most other loans. During the first term of your loan, you will pay low monthly rates, but once the first term is over, you will be expected to pay off the balance.
What can I use a Balloon ARM Mortgage for, and what are my options for a Balloon ARM Mortgage
During the first five to seven years (the length depends on your contract) the borrowers pay a fixed interest rate that reflects the market on their monthly payments, just like they would at the beginning of any other Adjustable Rate Mortgage. After the initial period is over, the borrower will be presented with the amount due, and will be expected to pay it off entirely. Refinancing may be an option, but some lenders will not allow it, so borrowers must be prepared to pay the amount due when their term is over. Therefore, a Balloon ARM is good options if you want to either sell your house, or are certain you will have the money to cover the remaining cost over your loan after five to seven years.
Why should I get a Balloon ARM Mortgage
If you choose a Balloon ARM, you will have low payments during the first five to seven years of your contract. This means that you can buy a house that you wouldn’t normally be able to afford at the time, but may have the resources to pay for after the five to seven year period (ex. substantial pay increase, inheritance, etc.).
How can I get a Balloon ARM Mortgage
We would be happy to help you apply for a Balloon ARM. Click here to get started.
How can my FICO/Credit Score affect my mortgage rate
Your FICO and Credit Score are essential and highly important components for determining your mortgage rate. If you score between 720 and 850, you have very little to worry about. You have A-paper credit, which is good credit. If you scored below 660, you will have a very hard time finding a lender who will work with you even though the official line between A-paper and Sub-Prime or Non-Prime lending is a score of 620.
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