10 years fixed with 30 years amortization?
Answers:
I can't tell based on how you phrased your question, but you are describing one of two loans:
1. A 30 year amortization with a 10 year maturity means you make payments just like a 30 year fixed rate mortgage for 10 years--but actually your loan matures after 10 years. So after 10 years you'll owe the remainder of the principal and interest. Generally people don't pay the baloon payment after 10 years though. They either sell their house way before then or they simply refinance their loan before the maturity date.
2. You also may be describing an ARM mortgage that matures in 30 years; the fixed rate period simply expires in 10 years. In this case you pay payments just like a 30 year fixed rate mortgage for 10 years (just like #1). After 10 years the loan isn't due though; the rate simply starts to adjust based on the market.
what that means is that you have a 30 year mortgage. your payments are amortized based on a 30 year pay pack period. your rate is fixed for ten years though. so after ten years be ready to refinance or deal with a new rate depending on if rates have gone higher or lower. it is a good long term fixed rate. many things can happen within the ten years. atleast you have 10 years of peace of mind.
I believe it refers to making payments (calculated as if you were paying over 30yrs) for ten years, then have a big 'ol ballon payment (remainder of principal) at the end of that ten year period.
It allows a lendee (you) to borrow at a fixed rate, but with (relatively) low payments, since you act like you have 30yrs to pay, but in reality, you pay off the balance in 10yrs.
I don't know your exact situation, but you might want to ask for other mortgage options, since the ballon payment will be, in all likely hood, extremely high.
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