balloon mortgage


Also found in: Financial.

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.
References in periodicals archive ?
Ellis III, an FBI accountant testified the fraudulently obtained money was used in part to pay interest on a balloon mortgage payment on the Fairfax property and to pay for improvements on the Delaware property.
He says he'll lend us the money to buy at a low interest rate and hold a balloon mortgage instead of us going for a bank loan.
"So if there is a need for certain balloon mortgage products in certain markets, whether portfolio or otherwise, we don't think the ability to offer them should be limited by charter type."
A balloon mortgage starts with a low interest rate and after a set period of time, the rate balloons.
Balloon Mortgage: A mortgage with periodic installments of principal and interest that do not fully amortize the loan.
"Despite Chabon's dazzling brilliance as a stylist, huge sections of Telegraph Avenue read like they've been written by a man being paid by the word who has a balloon mortgage due....
Balloon mortgage payments will come due over the next several months, and the club has been unable to refinance, Doyle said.
Betsy Johnson, D-Scappoose, to secure a $2.5-million disbursement from the Legislature to pay off a $2.5 million balloon mortgage payment on the society's Southeast Portland warehouse.
The balloon mortgage loan is an installment note whose amortization is longer than its term.
Rates were steep, though; a 15-year balloon mortgage (relatively reasonable monthly payments but a large amount due at maturity) for $84,000 had a rate of 12.25%, and a seven-year adjustable rate mortgage for $452,000 had a 7.2% rate.
The conclusion of their paper is that mortgage contracts that tend to have low payments early on, such as a balloon mortgage, are most successful in relaxing the borrowing constraint.