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Balloon Mortgages
Jack Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania. Visit the Mortgage Professor's web site for more answers to commonly asked questions.
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Related Articles From Mortgage Professor's web site: Is a Balloon Loan Better Than an Adjustable Rate Mortgage? May 4, 1998 "I have been offered a 5-year balloon loan at 6.5% and zero points, and a 5-year ARM [adjustable rate mortgage] at 6.125% and zero points. Is there any reason why I should not choose the ARM?" No reason, provided you confidently expect to be out of ... more... Balloon Mortgages Questions on Balloon Mortgages What Is a Balloon Mortgage? How Does a Balloon Mortgage Differ From an ARM? What Are the Advantages and Disadvantages of Balloon Mortgages Relative to ARMs? Can Borrowers Depend on the Lender's Commitment to Extend the Term of ("Roll-over") a Balloon ... more... Fixed-Rate vs Adjustable Rate vs Balloon Mortgages November 11, 2001 "My broker has offered me the following 6% loans: a 30-year fixed-rate at 1.125 points; a 7/1 ARM at 1 point; a 7-year balloon at 0.375 points; a 5/1 ARM at .875 points; and a 5-year balloon at 0 points. How do I decide which mortgage is best for me ... more... Do Balloon Loans Protect Mortgage Borrowers? Column Distributed August 24, 1998 "You said recently that a borrower must refinance a balloon loan? Isn't the lender obligated to extend a balloon loan at the borrower's request? Isn't that valuable protection?" It is true that at the term of a balloon loan, ... more... |
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