Balloon Mortgage

A balloon mortgage is a loan with a fixed-rate and fixed monthly payments for a set number of years followed by one large final balloon payment for all of the remainder of the principal balance. Typically, the balloon payment may be due at the end of five, seven, ten or fifteen years. Borrowers with balloon mortgage loans may have the right to refinance or pay off the loan before or at the time the balloon payment is due depending on the contractual agreement of the mortgage note.

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