Mortgage Glossary
Balloon Mortgage
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A balloon mortgage has low or interest-only payments for a set term, then requires one large lump-sum payment of the remaining balance at the end.
What Balloon Mortgage means
Borrowers use balloons expecting to sell, refinance, or pay off before the balloon comes due. The risk is being unable to do so when the balance comes due. These loans suit short-term plans or owner-financed deals.
Florida example
A seller-financed Ocala property used a five-year balloon: the buyer made low monthly payments, then refinanced into a conventional loan before the balloon balance of $185,000 came due.
Related Mortgage Terms
Still have questions?
Talk to a licensed Florida mortgage broker — no cost, no obligation.