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Tarrant County, TX Balloon Loans

Tarrant County, TX Balloon Loans

In many ways, Tarrant County, TX balloon mortgages are similar to fixed rate mortgages. The payments are both calculated in the same way and the payment is the amount required to pay off the loan over the standard 30 years. A balloon mortgage is a type of home loan where the balance is paid in full at the end of the term.

A 5 year balloon mortgage may be amortized over the course of 30 years, but the balance would be due in full after the initial 5-year period was up.

Tarrant County, TX Balloon Loans

Advantages of Tarrant County, TX Balloon Mortgage

There are many advantages to getting a Tarrant County, TX balloon loan. These mortgages typically come with no down payment. This is beneficial to buyers who don’t have the money for the down payment on hand, but expect to collect a large sum in the future, or buyers who want to sell before the loan matures. Many buyers who plan to move before the balloon period will end often prefer balloon loans over adjustable rate mortgages.

The payments on Tarrant County, TX balloon mortgages are much lower and the interest will typically be low as well. These loans are low risk for Tarrant County, TX lenders due to the fact that most mature after 5 years and the balance left on the mortgage can be refinanced when the loan is up.

Advantages of Tarrant County, TX Balloon Mortgage

Disadvantages of Tarrant County, TX Balloon Loans

There are heavy risks involved with Tarrant County, TX balloon loans. One of the least attractive features of these mortgages is the large “balloon” payment due at the end of the loan. This is a significant financial obligation for mortgage holders. Many borrowers may have difficulty raising the money which can lead to refinance or foreclosure.

New Tarrant County, TX Mortgage Rules

There are new mortgage guidelines that have been in effect since January of 2014 that help protect borrowers. These changes were intended to protect lenders and borrowers from common pitfalls. The most well-known guideline is known as the “qualified mortgage rule.” All lenders in Tarrant County, TX are required to follow guidelines to ensure that the borrowers are not getting loans they can’t afford. Balloon mortgages usually meet qualified mortgage standards, but could also be considered a risky feature in a mortgage loan.

Disadvantages of Tarrant County, TX Balloon Mortgages
 
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