Fly the balloon mortgages, pay less and buy your dream house. (PRWEB) January 20, 2005 -- Balloon Mortgage is a short term financing solution. The interest rate is lower than the market rate and you need to pay the principal only at the fag end of the term. This option is viable for the following: - First time buyers- They could save money for settlement and home improvement - Advancing professionals- Their income would show a progression and would be able to pay off the mortgage after a few years. - Short time residents- Those who intend residing in their house for 5-7 years - The investment savvy – they would prefer investing the money saved. They not only secure for the lump sum payment due but also earn dividends Balloon mortgages are similar to interest only mortgages. While the latter is not a mortgage in itself, only a payment method, the former is a mortgage type. The essential features of balloon mortgage have been listed in http://mortgagekb.com/balloon-mortgage.html Moreover balloon mortgages have the advantage of a lower than market rate. Usually these have a loan term of 5 -7 years and are eventually converted into conventional 30 year fixed mortgages. The affordability factor is the key when one opts for balloon. One does not know what his circumstances would be 5-7 years from then, and whether he can afford to pay the payment due. Most balloons are clubbed with the conditional refinance clause as well. A written request needs to be given to the lender for the refinance option 45 days prior to the due date (this can be different for different states). The lender is not obliged to allow it. The last 24 payments must be on time and the current interest rate should not exceed 5%. Only then is this option available In real estate terms balloon mortgage is called ‘bullet mortgage’. As the huge amount due would cause a sensation of a bullet zapping through the debtor. Nevertheless, balloon mortgages are being adopted in spite of the larger one-time payment especially when the rates are soaring higher by the day. For more on mortgage and related issue, you can log onto: http://www.mortgagekb.com.