Home Buying Terminology - The Balloon Loan

Home Buying Terminology: An A-to-Z review of common terms you'll encounter during the home buying process.

Balloon Loan - With a balloon loan, the regular monthly mortgage payments are followed by a lump sum (or "balloon") payment of the remaining balance. The initial payment term is usually 5, 7 or 15 years -- after which you have to either refinance the loan or pay it off in a lump sum.

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