Balloon Payment Advance

An intermediate term fixed rate advance with amortization schedules of 15, 20 or 30 years, with balloon principal payment at the end of the term to maturity:

  • Facilitates the match funding of balloon mortgages
  • Can be used to finance fixed rate mortgage portfolio (with usual prepayments of fixed rate mortgages, weighted average term of most portfolios is commonly in the 5 to 7 year range)
  • Enables the borrower to purchase similarly structured mortgage-backed securities
Maturity
5, 7 or 10 years; amortization over 15, 20 or 30 years
Rate
Fixed for entire term to maturity
Accrual Basis
30 / 360 day basis
Interest and Principal are Paid
Monthly (payment is first credited to interest due, then to principal reduction)
Principal Prepayment Policy
At the time of the borrowing, a corresponding coupon rate for the MMA is established, based on the coupon rate of a FHLMC/FNMA MBS; the coupon rate is used to establish a constant prepayment rate (CPR) index; during each 12 month period, borrower is entitled to make a principal prepayment equal to the corresponding CPR percentage without fee; any additional prepayment may be subject to prepayment fee; monthly payment is reset after any prepayment of principal
Submission of Application
A Balloon Payment Advance application is required for each borrowing

To learn more about our Advance products, contact Jeff Berryman or Lisa Wishart at 800-828-4191.

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