A Ballon Mortgage works the following way. First you pick a term, usually 30 years, and then you need to pick the term which the payment is due, usually 15 years.
With a ballon mortgage the payment calculations are divided into the 30 years but it is due in 15 years. By the 15th year the entire mortgage is due.
An example, is a 30/15. Suppose a $400,000 loan for 30 years has a monthly payment of $2,000, with a ballon mortgage all $400,000 will be due at the end of the 15 years although the calculations were made on a 30 year term.
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