With a monthly amortization mortgage payment of $1,000 and rising interest rates, your new payment would normally be $1200/month. But with an amortization mortgage with capped payment, you would only be paying $1075 and the other $125 gets added to your loan balance. But this setback of a negative amortization mortgage can be counteracted if you choose to pay the additional amount now and not wait for its payoff overtime. Several bad credit mortgage loans are being offered by some alternative loan companies. When you choose one company, make sure that you know what is required of you when you ask for a bad credit mortgage loan. Below are a few facts you need to know about bad credit mortgage loans. Higher Interest Rates for Bad Credit Mortgage Loans It is only natural that high interest rates are charged for those borrowers who are on a bad credit mortgage loan. 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. This is because variable rate mortgages may turn out to be cheaper than fixed rate mortgages in the long run. Several lenders offer variable rate mortgages among their product lines. Some of these lenders are listed below, along with a brief outline on their variable rate mortgage product. Variable Rate Mortgage by ING Direct Mortgages The ING Direct line of variable rate mortgages offers one of the lowest rates available in the market today. Loans are offered with different mortgage interest rates. Take for example a traditional 30-year mortgage. This type of loan involves a fixed mortgage interest rate. The mortgage interest rate of a 30-year mortgage is higher than that of a 15-year mortgage. Other alternative programs and payment plans for your loans can some difference on your mortgage interest rate. These include US Treasuries, corporate bonds, foreign bonds, bank rate mortgages, and others. The bank rate mortgage investors act like typical consumers. That is, like you, they want two opposing things: low payments on their bank rate mortgages and high returns on investments. The demands of these investors play a significant role in moving the yields of the bank rate mortgage markets.