Replies to post #18939 on LB's - "the edited stock pit" (wayne)

[Sportsjunkie]

now you are right up omni's alley with that question..
my understanding is was a bi weekly small payment
with the large pay out at the end and the length of
the loan was much shorter than the normal time span
like 5-7 years...

[sprintcar]

A balloon mortgage is usually rather short, with a term of five to seven years, but the payment is based on a term of 30 years. They often have a lower interest rate, and can be easier to qualify for than a traditional 30 year fixed mortgage. There is, however, a risk to consider. At the end of your loan term you will need to pay off your outstanding balance. This usually means you must refinance, sell your home or convert the balloon mortgage to a traditional mortgage at the current interest rates.

So, with interest rates the lowest they have been in many many years, the attractiveness of this type of mortgage loses it's effectiveness because interest rates are expected to rise.