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Real Estate Loans | 1st Mortgage Balloon Note
Overview
 These mortgage loans are kept "in-house". Basically, we secure the rate for 5 years, after that, simply rewrite the note to current balloon rates and secure for another five years. This is a great option if you are not planning to stay in the home long term. Given the fact they are kept "in-house", means less hassle, less paperwork, and less cost for you. | Loan Type 5 year Balloon As low as: 7 year Balloon As low as: | APR* 5.25% 5.75% | *APR is Annual Percentage Rate. Rates are subject to change. Your actual rate is determined by your credit score. |
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FAQs
Question: What exactly is a "balloon" note?
Answer: Our five year balloon note works this way: Your rate is locked in to a five year note. Your monthly payments are based on a 30 year amortization. So what you have is 59 monthly payments and the 60th payment ( the "balloon") which gets refinanced at the end of five years. You enjoy a lower monthly payment, yet you are not bound to long term financing.
Question: Why would I want a 5 year balloon loan over a long term fixed rate?
Answer: There are many reasons to go with a 5 year balloon note. First, we keep all balloon notes "in-hose", meaning we service these loans and they are not sold on the secondary market, which allows us to be more flexible with the terms and conditions of the loan. If you are not planning on staying in your current home long term, then a 5 year note may be all you need.
Question: How does a 5 year balloon note work?
Answer: Basically, we lock in the rate for five years, then when the note comes due, we rewrite the loan for another five years (at no additional cost to you) at the current balloon rate or you may choose to go with a long term fixed rate loan, however, additional fees or costs may apply.
Question: How much down payment do I need for a five year balloon?
Answer: Like we said earlier, we can be more flexible on balloon notes. We will finance up to 90% of the appraised value, which means you only need 10% down, and not 20% like other programs.
Question: Do I have to escrow my property taxes and homeowners insurance?
Answer: No. We do not require tax/insurance escrows, however, you may open a tax savings account and escrow on your own. The tax account pays the same dividend rate as Regular Shares and you have access to your funds at any time. We DO require taxes and insurance to be paid by the borrower and proof of payment supplied to the Credit Union for your files. Nonpayment of taxes and insurance may cause your loan to be in default.
Question: How far out can I amortize my payments on a five year balloon?
Answer: We can amortize your loan payments out to 30 years. This will determine the amount of your 59 monthly payments, and the resulting 60th balloon payment.
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