balloon mortgage payment

Balloon payments is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity. An example of a balloon payment mortgage is the seven-year Fannie Mae Balloon, which features monthly payments based on a thirty-year amortization. Because borrowers may not have the resources to make the balloon payment at the end of the loan term, a "two-step" mortgage plan may be used with balloon payment mortgages.

Source: en.wikipedia.org

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