Mortgage Advisors

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Balloon Mortgage

Balloon mortgages are not used as often as fixed-rate and adjustable-rate mortgages. A balloon mortgage is a short-term loan. With a balloon mortgage, the borrower will make payments for a certain period of time and ultimately make one large payment at the end of the life of the loan. The shorter term with a balloon payment mortgage means less risk related to interest rates, than with a 30-year fixed rate mortgage. The borrower also has the security of a fixed payment. Balloon mortgages are used more often for commercial real estate than for residential real estate.