Types of Mortgages

For a bi-weekly mortgage, you pay half the monthly payment every 2 weeks resulting in the payment of one extra or 13 monthly payments instead of 12 or 26 payments in a year. The extra payment helps payoff the bi-weekly mortgage early and save on interest expenses over the life of the loan. Converting to a bi-weekly mortgage does not change the interest rate.

A bi-weekly mortgage may carry higher upfront costs.

You can reduce interest expenses by sending additional payments. Use the additional payments calculator to determine the impact of additional payments on your loan balance and interest expenses.

Balloon Mortgages

 

On a balloon mortgage, the loan balance or ‘balloon’ is due in one lump sum at the end of a specified period. The initial payments are low or could be the same as those on a fixed rate mortgage because the loan is financed over a long term. For e.g. You may secure a 10 year balloon mortgage of $ 100,000 at 6.5%. For the first 10 years, your payments will be identical to those on a thirty year mortgage. At the end of 10 years, the balloon payment or balance on your loan of $ 84,775 will be due. You may pay the balloon, secure another loan for the balance or sell the house before the balloon payment is due.

VA Loans

 

The Home Loans for Veterans program at http://www.homeloans.va.gov states that “The main purpose of the VA home loan program is to help veterans finance the purchase of homes with favorable loan terms and at a rate of interest which is competitive with the rate charged on other type of mortgage loans.” This website provides all the details on the VA program including advantages over conventional loan programs, requirements for VA loan approval as well as FAQs on the features of the loan program etc.