Balloon Mortgage

This is a mortgage that behaves at first like a fixed rate mortgage but usually with a shorter term then requires you to make a lump sum or balloon payment at the end of the term to pay it off.

Reasons for getting a Balloon Mortgage would be lower payments or the intent to pay it off early if you are selling or know you will be receiving a large amount of money such as an inheritance.

Reasons not to get a Balloon Mortgage – the Balloon payment. As usual pay particular attention to the details and terms you must agree to when you are signing the loan documents.