Balloon mortgage, any experience?

[I have WHAT in my yard?]

RUN! Balloons only work in very specific situations and only then when you really have the ability to pay it off as terrilacey does.

Both the real estate market and the banking system are far too volatile right now to assume what conditions will be down the road. Some mortgage brokers now are pushing up balloon payments (fine print always the fine print they can move the draw date of the balloon) It makes no sense because they are pushing people into foreclosure, but no one said the banks were making good decisions right now!

If affordability is not the issue go lowest rate fixed you can swing.

 

[vfem]

Balloon anything means EXPANDING payment and payoff!!!

Go look up suze orman... she is completely against it. Most balloon payoffs are not an exact number at the time you agree to it. Which means after a certain date you have to pay off the final amount in full whatever it is!

Its too risky, and I really don't think mortgage companies should be offering such things anymore after all that's been happening.

P.s. - Your basic 30 year fixed is like 4.75% right now?! What's wrong with that?! We got a 5.5% last year when we bought, we saved $$$ for 2 years to buy and we pay less to own a house with an acre of land then we did for a 2 bedroom apartment?! There are MAD good deals out there.... foreclosures where houses are WAY below the median house prices for your area. You should even qualify for the $8000 first time home buyer credit if you buy this year. That's $8000 to fix anything on the home come tax time.... money to pay down your mortgage.... We got the $7500 and we have to pay that back, you won't have too!!!!!


P.s.s.- I don't know why you don't qualify for a normal loan?! Even with 2 homes on the property you should try for an FDA loan for larger property, or even the FHA loans will assume responsibility for a multiple home purchase on land IF you say you are not selling the other property or NOT renting it out. If its for a relative to live in... they WILL give you a loan. There are agricultural loans too if you state you'll be raising chickens on the property, or putting in an orchard to sell apples! They don't care, they'll cover you.... So so so so many options out there.... don't let them fool you!

 

[NancyP]

Thanks guys,
You were a great help. I did a search on ag loans and found one to do a 30 year fixed rate and 10 % down.
Nancy

 

[ruth]

Quote:
If it doesn't qualify for a "normal loan" now it won't qualify for one in five years (or however long the terms is) when the full balloon payment is due.

Balloon mortgages are not ARMs which mean adjustable rate where the interest rate varies year after year. Balloon means the full payment is due at the end of the term. Many people got these loans thinking they would be in a better position to qualify for a "normal loan" later, but in fact, are not and then lost their home because they could not come up with the full and final payment in X years.

If you can't get a "normal" loan - Run, run, run.