Balloon Payment Mortgage
September 29th, 2006Balloon payment mortgages are called such because borrowers who are on this type of loan are usually set up for a “balloon†payment at the end of their loan term. In most other loans, monthly payments do not only pay off the interest but also chip away at the principal amount – the original amount owed. Thus at the end of each loan term where balloon payment mortgage is applied, no money is owed.
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