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SIRVA Mortgage Products — Balloon Loans
A balloon loan is amortized like a fixed-rate mortgage
for a set number of years (usually five or seven), and then must be paid
off in full in a single "balloon" payment. Balloon loans are popular with
those expecting to sell or refinance their property within a definite
period of time.
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Interest rate is fixed for the life of the loan.
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Principal & interest payments are based on a 30 year amortization term.
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Outstanding principal balance (balloon payment) is due at the end of loan
payment schedule (either 5 or 7 years).
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Used when the possibility of relocation in the next 5-7 years is high.
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Some balloon products allow the loan to be modified or extended to a market
level fixed rate on the maturity date for the remaining term (23 or 25 years).
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