Today's word: BALLOON PAYMENT
Theme for this fortnight: REAL ESTATE
Theme for this fortnight: REAL ESTATE
An
oversized payment due at the end of a mortgage, commercial loan or other
amortized loan. Because the entire loan amount is not amortized over the life
of the loan, the remaining balance is due as a final repayment to the lender.
Balloon payments are often prepackaged into what are called "two-step mortgages." In this type of mortgage, the balloon payment is rolled into a new or continuing amortized mortgage at the prevailing market rates.
Balloon payments are often prepackaged into what are called "two-step mortgages." In this type of mortgage, the balloon payment is rolled into a new or continuing amortized mortgage at the prevailing market rates.
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