Tag Archives: balloon mortgage

Balloon mortgages have some tempting qualities. They come with lower interest rates and, because of this, smaller monthly payments. This can help borrowers get into a pricier home that they might not have been able to afford otherwise but balloon mortgages come with one huge risk: At the end of a set period, borrowers must pay off the remaining balance on these loans in full (the "balloon") and these balances can be quite large. So, how exactly do these mortgages work, and who do they work best for? Let's break it down.

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