Payment options for a home loan

Could there be a baloon payment with that type of home loan? 

There could be a balloon, but not necessarily. That's just another factor to consider, like a "prepayment penalty". The reason why people take Variable rates is fairly simple. The rate is initially "fixed", often for two years. All other things being equal, that initial interest rate is usually lower than what they could get with a 30 year fixed rate. The "plan" is to refinance before it goes up. Where people get caught is when they are unable to refinance after that time, whether because they didn't fix their credit, or the interest rates went up so much that they can't afford the going rate, or the home value went down. I suspect that most of the foreclosures going on now are people that intended to refinance before the rates varied, but didn't or couldn't. Anyone taking a variable rate now with such a plan is in for an unpleasant surprise when they get to the part of the plan where they refinance at a fixed rate.

What is the best way to get a variable home loan rate changed to a fixed lower rate loan?

We currently have an interest only loan with an interest rate that keeps climbing. We want to get it paid off but there's no way with the current loan we have. Any suggestions?