BALLOON MORTGAGE

The Fannie Mae seven-year balloon mortgage is a type of fixed-rate mortgage with a term
of seven years. The principal and interest you pay are amortized over a longer period
(30 years) than the actual term of the mortgage. At the end of the balloon period, you may
pay off the outstanding balance with a lump-sum payment or exercise the option to refinance
for the remaining term. The option to refinance is conditional, meaning you have to meet certain conditions (such as a history of timely payments or no second liens on your property).

Advantages:

• Ideal if you plan to sell or refinance your home within seven years and want a
  low monthly payment during that time. The interest rate you pay on a balloon
  mortgage is usually lower than a comparable 30-year fixed-rate mortgage.
  
  
• With a refinance option at the end of seven years, you have a "safety net" in
  case a planned relocation doesn't take place or economic conditions prevent
  you from moving to a larger home. (You may want to understand all the
  conditions needed for a refinance before getting this loan.)
  
  
• You need not re-qualify for this loan when refinancing at the end of seven
  years as long as the new interest rate is not more than 5 percent above the
  current interest rate.

Details:

• The refinance condition is not automatic - you must exercise the option.
  
  
• Refinancing conditions may include payment of closing costs and a lender fee,
  as well as no 30-day late payments in the previous 12 months and no other liens
  on your property.
  
  
• You must occupy your property at the time of refinancing.

This mortgage can be used to buy one-family, principal residences, including condos and
planned unit developments. Manufactured homes are also eligible. (Manufactured housing
units must be built on a permanent chassis at a factory and then transported to a permanent
site and attached to a foundation.)

©2004 Fannie Mae. All rights reserved.

GETTING STARTED
If you would like to begin the application process for this loan, complete our online application
or learn more about our current rates with today's rate sheet.

If you have questions or would like to speak with me, please give
me a call at 888.691.0151 or drop me an email at dave@lenderdave.com.