What is a balloon mortgage?
The Bankrate.com financial term of the day is: "Balloon Mortgage."
A balloon mortgage gets its name from the pumped-up payment that the borrower must make at the end of the loan term. It's a short-term mortgage, maybe lasting for seven or 10 years, with regular payments that might be interest-only. When the loan's time is up, the balance owed on the property is due in a fat lump sum.
A home loan that doesn't last long and has an inflated final payment is called a balloon mortgage.
To shop for a great mortgage rate, visit the mortgage rate tables at Bankrate.com.