balloon payment


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Balloon Payment

The final (large) payment that repays all the remaining principal and interest of a partially amortized or unamortized loan. See: Bullet.

balloon payment

A final loan payment that is significantly larger than the payments preceding it. For example, a bond issuer may redeem 3% of the original issue each year for 20 years and then retire the remaining 40% in the year of maturity.

balloon payment

The full principal amount due at the end of a balloon mortgage.

References in periodicals archive ?
By guaranteeing the balloon payment, or residual value for $3 million, monthly payments would be reduced to $100,305, yielding a savings of $2,051,520 over the term of the loan.
Because a refinancing risk exists at maturity for balloon payment mortgage loans, Fitch assumes a higher level of defaults.
For example, mortgages with a balloon payment feature often are attractive to borrowers because they allow distressed borrowers or young borrowers who have low cash incomes to buy homes and match payments with their rising income stream.
Save on Refinancing Fees: Few businesses can pay off their entire balloon payment in five years, and that creates a cycle of continually refinancing every five years.
The new five-year mortgage Note, which covers the balloon payment and the closing costs of the transaction, totals $1.
When the "dust settles," these borrowers may find that they have paid a high number of loan origination and broker points (often financed in the borrowed amount) and have agreed to a loan with an interest rate at the highest levels in the market--sometimes with monthly payments that even exceed their monthly income and often with a balloon payment due.
One bank was proposing that a balloon payment would be reduced at the end of the loan.
In return, Best Buy will make interest payments for three years, with a final balloon payment in June 1996 for $8.
The mortgage will be amortized on a 30 year schedule, and matures with a balloon payment due June 1, 2016.
The mortgage pool consists of conventional, fixed-rate, balloon payment, five- and seven-year mortgage loans (35 percent and 65 percent, respectively) secured by one- to four-family residential properties located primarily in California.
The amended and restated note is due and payable on April 19, 2008, at which time, we will be required to make a balloon payment of the entire outstanding principal balance and all accrued interest.
The mortgage pool consists of recently originated, conventional, fixed-rate, five- and seven-year (approximately 20 percent and 80 percent, respectively) balloon payment mortgage loans secured by one- to four-family residential, owner-occupied properties located primarily in Northern and Southern California (24 percent and 54 percent, respectively).