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PROGRAMS
Conforming 7/23 Balloon Mortgage
General Overview 7/23 Balloon mortgage - the rate
is fixed for a period of 7 years and then converts to a new fixed rate for the
remaining 23 years. The new rate is typically based on the Fannie Mae 60 day
net yield index and is added to a pre-determined margin, usually 0.500. Note
that converting to this new rate is permitted only if the prescribed conditions
are met and if not, then the loan is due and payable to the lender as a balloon
loan (review your loan documents carefully). The loan is fully amortized (or
paid off) in 30 years if the normal payment schedule is followed.
Fannie Mae & Jumbo Mortgage Rates Just One Click!= Current Rate Chart
Conditional Right to Refinance
The loan becomes due and
payable after 84 months. However the borrower has the option to reset the loan
provided the following conditions are met:
Monthly payments are current and no payment has
been more than 30 days late for the 12 month period prior to the maturity date;
and
No subordinate financing exists; and
Borrower makes a written request to the
servicer no more than 45 days prior to the balloon maturity date; and
Borrower pays a processing fee, title search
fee.
The new interest rate will be a fxied rate and is based on
the FNMA 60 day net yield plus 0.5% rounded to the neartest one-eighth of one
percent.
NOTE: If the new interest rate exceeds the old interest rate
by more than 5% then the borrower may not exercise the reset option.
