Balloon/reset MortgagesOffer stable, lower payments to your financially savvy borrower
Our 5- and 7-year balloon/reset mortgages are a viable solution for the financially savvy borrower who wants the benefit of a stable, lower payment for an extended period of time with the option to reset their mortgage at the end of the fixed payment term. Offering your qualified borrowers balloon/reset mortgages also lets you expand your product options, allowing you to increase your market penetration and reach more borrowers.
Balloon/resets provide a variety of benefits, particularly for move-up borrowers, those interested in home financing investment options and those not planning to stay in their home longer than five or seven years. These customers get the benefit a lower rate and a lower, stable monthly payment. And, if their plans change or rates drop, they’ll have the option to reset at the end of the fixed-payment term.
Product Features
| Feature | Requirements |
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| Property Type |
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| Eligible Mortgage Products |
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| Transaction Type |
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| Maximum LTV Ratios |
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| Eligibility/Underwriting |
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| Execution Options |
* See our selling system availability matrix for a list of specific Balloon/reset Mortgages eligible for sale best efforts or mandatory, servicing released. |
| Delivery Fees |
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| Special Delivery Requirements |
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| Single-Family Seller/Servicer Guide |
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Download a Balloon/reset Mortgage fact sheet for more details.
Lender Benefits
Balloon/reset mortgages help you:
- Expand your market penetration to borrowers who do not plan to stay in their home longer than five or seven years, including move-up borrowers and investment-oriented customers.
- Take advantage of a variety of cash and guarantor execution options, based on your individual business needs.
- Expand your offerings for borrowers interested in exploring a variety of refinance options.
Benefits for Your Borrowers
Balloon/reset mortgages help your borrowers:
- Leverage lower initial rates with stable monthly payments for the first five or seven years.
- Get the security of a fixed-rate mortgage and the option to reset when the initial balloon mortgage matures.
- Enhance their purchasing power, particularly for borrowers that do not plan to stay in their homes for the entire term.
For More Information
- Call your Freddie Mac representative.
- Print out a Balloon/reset Mortgage fact sheet.
Training Opportunities
Visit The Learning Center for live and recorded web conferences, access to classroom-style workshops and self-study tools – all designed to help you stay competitive, serve more borrowers and make it easier to do business with us.
The information in this document is not a replacement or substitute for information found in the Single-Family Seller/Servicer Guide and/or the terms of your Master Agreement and/or Master Commitment.
