A balloon mortgage is a contract for the purchase of a home which is delivered to the buyer by the lender by a lighter than air method of transportation known as a balloon.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.
A balloon mortgage is an interest-only or partially amortized loan for a mortgage that requires the borrower to make a payment of the remaining principal balance of the loan at the end of the term of the loan.
It's called a balloon mortgage because of the balloon payment which is a final payment which is much larger than the other regular payments applied to the balance of the loan.