When people think about fixed-rate loans, they often think only of the 15, 20, and 30-year repayment options. However, other repayment options exist for fixed-rate residential mortgage loans. Consider whether the balloon fixed-rate loans repayment option or the biweekly repayment option is best for you.
A balloon mortgage allows the borrower’s monthly payments on their home mortgage loans to be repaid over a longer term than the actual term of the loan. At the end of the term, the borrower is required to pay off the outstanding balance with a lump sum payment, or they can refinance their home mortgage loan.
Biweekly mortgages, on the other hand, allow you to repay your loan twice a month; the monthly amount is split in half, and you pay on your loan biweekly. The biweekly repayment option is great for those who are paid twice a month as this can be automatically deducted from your check. In addition, frequent payments using the biweekly fixed-rate loan repayment plan can help increase the equity on your home more quickly, which is helpful if you have bought a house that needs fixing up. You can also save on the interest by paying your home mortgage loans biweekly.
The balloon or biweekly fixed-rate loans may be just what you have been searching for to help you purchase your new home. If so, talk to your potential lender and see what they have to offer.
