Definitions for balloon payment
bal·loon pay·ment

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1. balloon payment

   A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity. The final payment is called a balloon payment because of its large size. Balloon payment mortgages are more common in commercial real estate than in residential real estate. A balloon payment mortgage may have a fixed or a floating interest rate. The most common way of describing a balloon loan uses the terminology X due in Y, where X is the number of years over which the loan is amortized, and Y is the year in which the principal balance is due.An example of a balloon payment mortgage is the seven-year Fannie Mae Balloon, which features monthly payments based on a thirty-year amortization. In the United States, the amount of the balloon payment must be stated in the contract if Truth-in-Lending provisions apply to the loan. Most commonly, term lengths are five or seven years.Because borrowers may not have the resources to make the balloon payment at the end of the loan term, a "two-step" mortgage plan may be used with balloon payment mortgages. Under the two-step plan, sometimes referred to as "reset option," the mortgage note "resets" using current market rates and using a fully amortizing payment schedule. That option is not necessarily automatic and may be available only if the borrower is still the owner/occupant, has no thirty-day late payments in the preceding twelve months, and has no other liens against the property. For balloon payment mortgages without a reset option or if the reset option is not available, the expectation is that either the borrower will have sold the property or refinanced the loan by the end of the loan term. That may mean that there is a refinancing risk. Adjustable rate mortgages are sometimes confused with balloon payment mortgages. The distinction is that a balloon payment may require refinancing or repayment at the end of the period; some adjustable rate mortgages do not need to be refinanced, and the interest rate is automatically adjusted at the end of the applicable period. Some countries do not allow balloon payment mortgages for residential housing: the lender then must continue the loan (the reset option is required). For the borrower, therefore, there is no risk that the lender will refuse to refinance or continue the loan. A related piece of jargon is bullet payment. With a bullet loan, a bullet payment is paid back when the loan comes to its contractual maturity (for example, when it reaches the deadline set to repayment at the time the loan was granted), representing the full loan amount (also called principal). Periodic interest payments are generally made throughout the life of the loan.

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1. Balloon payment

   A balloon payment is an unusually large payment due at the end of a mortgage or loan. Since the payments are not spread out, this large sum is the final repayment to the lender. Holding back most of a debt and paying it only towards the end of the agreement makes both those last payments and the total amount repaid much larger. The name comes from the fact that the debt becomes inflated like a balloon as a result of the compound interest accumulating on the large sum. Another, more technical term is partial amortization. A related piece of jargon is bullet payment. When a large debt has to be repaid entirely in one big payment it can be financially crippling, making it a metaphorical bullet to the head of a company which does not have the cash on hand. With a bullet loan, a bullet payment is paid back when the loan comes to its contractual maturity—e.g., reaches the deadline set to repayment at the time the loan was granted—representing the full loan amount. Periodic interest payments are generally made throughout the life of the loan. The more usual arrangement for repaying a loan is called amortizing payment or amortization. With amortization, portions of the principal are periodically being repaid until the loan matures. With full amortization, the amortization schedule has been set so that the last periodical payment comprises the final portion of principal still due.

How to pronounce balloon payment?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say balloon payment in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of balloon payment in Chaldean Numerology is: 2

2. Pythagorean Numerology

   The numerical value of balloon payment in Pythagorean Numerology is: 3

References

1. ^ Wikipedia
   https://en.wikipedia.org/wiki/Balloon_Payment
2. ^ Wikidata
   https://www.wikidata.org/w/index.php?search=balloon payment