One point on your second mortgage loan is equivalent to one percent of the amount you borrow. So, if you were to get a second mortgage loan of $10,000 with an eight-point fee, then you would have to pay $800 in "points." Second mortgage loan companies may charge you in varying number of points so if it might be helpful if you do a comparison first. No matter the case, when the balloon payment mortgage term expires, the balance is due in full. Most second mortgages are commonly balloon payment mortgages. For instance, your balloon payment mortgage is $20,000 with a monthly interest-only payment set up for ten years. When your balloon payment mortgage term ends, you still have to pay for the $20,000 principal amount. With fixed rate home mortgages, your interest rates are guaranteed and your monthly payments are predetermined. A 30-year fixed rate home mortgage has its own advantages and disadvantages. Usually fixed rate home mortgages with 30-year loan terms give the consumers the opportunity to borrow money on a long-term basis. However, if you combine the two payments in an 80 20 mortgage loan, you get lower costs. You can see evidence of this just by comparing the cost of an 80 20 mortgage loan with the cost of a regular loan with PMI. The 80 20 mortgage loan usually costs less each month. 80 20 mortgage loans are structured by lenders in several ways. This also means that you can slowly and steadily reduce your bad credit mortgage loan balance, providing for better affordability. A Few Companies Offering Bad Credit Mortgage Loans Bad Credit Loans & Mortgages are offering a bad credit mortgage loan program that involves the following key features: lowest interest rates in the U. Most lenders of interest-only mortgage rates do not put any restrictions or penalties should you find it convenient to start paying off the principal loan balance. Even with prepayments, many interest-only mortgage rate lenders will still let you pay up to 20% of your loan balance during any 12 month period without prepayment penalties.