Balloon Mortgages

A balloon mortgage can be an excellent option for many home buyers. A balloon mortgage is usually rather short, with a term of five to seven years, but the payment is based on a term of 30 years. They often have a lower interest rate, and can be easier to qualify for than a traditional 30 year fixed mortgage. There is, however, a risk to consider. At the end of your loan term you will need to pay off your outstanding balance. This usually means you must refinance, sell your home or convert the balloon mortgage to a traditional mortgage at the current interest rates.

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Definitions

Mortgage amount: Original or expected balance for your mortgage.
Interest rate: Annual interest rate for this mortgage.
Term in years: The number of years over which you will repay this loan. The most common balloon mortgage terms are 5 years and 7 years. After the mortgage term is complete, you will then need to refinance or pay off the remaining balance.
Monthly payment: Monthly principal and interest payment (PI). The monthly payment is calculated using a 30 year term.
Total payments: Total of all monthly payments over the term of the balloon mortgage. This total payment amount assumes that there are no prepayments of principal.
Total interest: Total of all interest paid over the term of the balloon mortgage. This total interest amount assumes that there are no prepayments of principal.
Prepayment type: The frequency of prepayment. The options are: none, monthly, yearly, and one-time payment.
Prepayment amount: Amount that will be prepaid on your mortgage. This amount will be applied to the mortgage principal balance, based on the prepayment type.
Start with payment: This is the payment number that your prepayments will begin with. For a one time payment, this is the payment number that the single prepayment will be included in. All prepayments of principal are assumed to be received by your lender in time to be included in the following month's interest calculation.
Savings: Total amount of interest you will save by prepaying your mortgage.

Interlinc Mortgage Services, LLC #205696 – Texas Department of Savings and Mortgage Lending Complaint and Recovery Fund Notice

Interlinc Mortgage Services, LLC. is licensed under the laws of the State of Texas and by state law is subject to regulatory oversight by the Department of Savings and Mortgage Lending. Complaints regarding mortgage bankers should be sent to the Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be downloaded and printed from the department's website located at http://www.sml.texas.gov or obtained from the department upon request by mail at the address above, or by telephone at its toll-free consumer hotline at 1-877-276-5555, by fax at 1-512-475-1360, or by e-mail at smlinfo@sml.texags.gov

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF MORTGAGE BANKERS . A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEB SITE AT WWW.SML.TEXAS.GOV