If I were to get a balloon mortgage....

Question

are you allowed to pay extra principal each month?

Answer 1

Probably, but if you get a balloon, the whole point is that you plan to sell before the balloon is due. Why build up equity if you are planning to sell? The advantage of a balloon is low payments. If you want to build equity, get a traditional mortgage.

In the current economy are you certain you can get a balloon?

Probably, but if you get a balloon, the whole point is that you plan to sell before the balloon is due. Why build up equity if you are planning to sell? The advantage of a balloon is low payments. If you want to build equity, get a traditional mortgage.

In the current economy are you certain you can get a balloon?

What happens if you lose your job just before the balloon is due and can't qualify for a new mortgage? What if your house drops in value and you can't sell?

I would NEVER recommend anything other than a 15-year FIXED mortgage with 10 to 20% down and payments that are no more than 25% of your take home pay.

Answer 2

Balloon mortgages were the down fall of the foreclosure problem in the 1980 just like ARM are now

Answer 3

almost every mortgage company would allow that with no penalty.  But some might.  This is a very good question to ask your loan officer.  If you are about to get a mortgage over the internet and there is no way to talk with a local loan officer--stop and get your loan from someone local.