A balloon mortgage is a mortgage that has a payment calculated over a long period like 30 years. However, the mortgage balance is due and payable before 30 years are up. For example, a 15 year balloon mortgage would mean the payment is calculated or amortized over 30 years but at the 15 year mark, [...]

Mortgages containing balloon payment terms work like this: you pay a monthly payment of principal and interest at a slightly lower rate than a non-balloon mortgage in exchange the lender expects you to payoff the loan early in the form of one last “balloon” payment. Here’s the catch: The balloon payment is the entire remaining [...]