Loans in which regular monthly payments are followed by a lump sum payment of the total outstanding balance. When the loan becomes due, a large sum or "balloon" payment is required to satisfy the mortgage.
A type of loan where the regular monthly payments are followed by a lump sum or "balloon" payment of the total remaining balance. More on balloon loans
Loans that the amortized term is greater than the due date of the loan. For example, 30 years amortized all due in 10 years. The payment is based on 30-year calculations.
A type of mortgage loan that becomes 100% due after a specified amount of time has elapsed (usually 7-10 years). When the loan matures, you must pay the loan off (Balloon Payment). The advantage of this type of loan is that the initial rate is usually lower The disadvantage is that you may have to refinance or pay off the loan if you do not sell the home by the time the loan matures.
Balloon loans offer lower interest rates for shorter term financing, usually five, seven, or ten years. At the end of this term, they require refinancing or paying off the outstanding balance with a lump-sum payment. Balloon mortgages may be suitable if you plan to sell or refinance your home within a few years and want a fixed, low monthly payment.
a fixed rate short term loan that requires monthly payments for a period of time and then (usually between 3-10 years) one large payment of the principal.
Loans that require level payments, just as a 15- or 30-year, fixed-rate mortgage does, but well before their maturity date (typically three to ten years after the start date), the full remaining balance of the loan becomes due and payable. Although balloon loans can save you money because they charge a lower rate of interest relative to fixed-rate loans, balloon loans are dangerous. Being able to refinance a loan is never a sure thing.