What kind of loan is most economical for the customer (not the bank)? A Baloon loan or one with a fixed interest rate all the way through? It seems like the balloon loans you would be paying more interest since you have to re-negotiate the loan every so often? Please, I need some experienced people! Thanks!
2006-07-19 04:08:26 · 2 answers · asked by sugarbud 3 in Business & Finance ➔ Credit
a fully amortizing note fixed rate is always the best. Balloon notes you will pay very little towards the principal. When the balloon payment comes due-- what if your credit status has changed? I am a loan officer and I most always recommend a fixed rated note.The bank will push balloons since you will most likely come back and back and back.
2006-07-19 04:32:21 · answer #1 · answered by golferwhoworks 7 · 0⤊ 0⤋
Look for an interest only loan. If this is for a home loan, you can actually get a 30-year fixed loan with a 10-year interest only option. You will get the low int. only payment at first. You can definitely pay MORE every month which will pay down the principle balance. The beauty of it is... You have CHOICE. After 10 years, the remaining principle balance will be amortized over the 20-year period. NOT a balloon payment. Of course, during any point of the time, you can refinance. :)
2006-07-20 19:50:12 · answer #2 · answered by Lending Guru 2 · 0⤊ 0⤋