balloon mortgage
American Heritage Dictionary:
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balloon mortgage
n.
A short-term mortgage in which small periodic payments are made until the completion of the term, at which time the balance is due as a single lump-sum payment.
Barron's Banking Dictionary:
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Balloon Mortgage
Mortgage that does not fully repay principal and interest by the maturity date. A balloon mortgage, also known as a nonamortizing mortgage, has a lower debt repayment than a conventional fixed rate mortgage loan, and thus is attractive to new home buyers whose incomes may be expected to increase, or to people who expect to sell their property and pay off the loan in a much shorter period than if they had borrowed with a conventional, fully-amortized mortgage. The two types of balloon mortgages are the Interest-Only Loan-a mortgage with payments that cover only the interest owed and the partially amortizing mortgage, also known as a Rollover mortgage-a short-term mortgage that must be refinanced at the end of a stated term, usually three to five years. See also Alternative Mortgage Instruments; Negative Amortization.
Barron's Real Estate Dictionary:
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balloon mortgage
A mortgage with a balloon payment.
Example: The balloon mortgage called for payments of $500 per month for 5 years, followed by a balloon payment of $50,000.
Example: The balloon mortgage called for payments of $500 per month for 5 years, followed by a balloon payment of $50,000.
| Balance, Principle Of, Balance Sheet | |
| Balloon Payment, Band of Investment |
Investopedia Financial Dictionary:
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Balloon Mortgage
A type of short-term mortgage. Balloon mortgages require borrowers to make regular payments for a specific interval, then pay off the remaining balance within a relatively short time. Some types of balloon mortgages can be interest-only for 10 years, and the final "balloon" payment to pay off the balance comes as one large installment at the end of the term.
Investopedia Says:
Balloon mortgages have the option for early repayment or can be set up similar to a 30-year fixed-rate mortgage with the embedded option. The total debt repayment of these loans is lower than that of conventional fixed-rate mortgages. Balloon mortgages take the form of interest-only loans or partially amortizing mortgages.
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Copyrights:
American Heritage Dictionary
The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.
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Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
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Barron's Real Estate Dictionary
Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
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Mentioned in
Balloon Payment
(in banking)
Balloon Maturity
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Constant-Payment Loan
(business term)
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