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Balloon Mortgage
A Balloon Mortgage is a mortgage loan where the rate is fixed
for a short period of time. Principal and interest is amortized
over a longer term than the actual mortgage term itself. Also,
Balloon Mortgages are available with as little as 5% down.
With a 5 year Balloon Mortgage Loan, the term is 5 years, but
the payments are amortized over a 30 year term. Once the 5 years
are up, you must pay off the entire balance of the loan or
refinance for the remaining term of 25 years. Two common Balloon
Mortgages are 5/25 and 7/23. |
