but i'd check the fine print of this offer. methinks there is something in there to ensure they get you some other way if you cut bait before the big rate hits...
I'm no expert, but those type of loans don't really exist anymore. Not sure if they made a law against it, but 'typically' there is no prepayment penalty on mortgages. (I'm sure they exist still, but are rare)
They get you because most people think they are going to be smart and avoid the ballon, but then life happened and you are like 'Oh shit my payments just went up $700 and rates are at 5.5 now"
But you should always read the fine print on the terms of the loan. By law there is a one-pager that details all the components of the loan.
Definitely try to understand the closing costs, there are certain things the lender has no impact on (VA transfer tax is a fun line item), but many others you can shop around (Title co, title insurance) and save close to $1000 on closing
IMO, get a lender who will do in-home closings. Going to a title company office and spending 2 hours is a real pain, but at your kitchen table isn't that bad. But I will add there is one big risk is the person closing
the person doing the closing is pretty much a fancy notary, so don't expect them to know all the answers on the documents. But most of them are legally required, so it's not like you don't have an option not to sign them to get the loan
I really don't like balloon payments, risk is so high and you are not saving 'that much'
only way they work is you 100% plan to flip/sell the house in a short period of time and you just want the lowest payment you can get for a few years