Balloon-mortgage definitions

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.
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A mortgage whose interest and principal payment won’t result in the loan being paid in full at the end of the mortgage term. The final payment on the mortgage is significantly larger than the regular payment and is called a balloon payment. Balloon mortgages, as well as balloon loans, often are used when the debtor expects either to refinance the loan closer to maturity or expects a large cash infusion to pay off the debt.
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