What is a balloon mortgage?

A balloon mortgage is a type of mortgage loan that is secured by real estate. It is typically used when a borrower wants to finance a large purchase, or when there is not enough equity in the property to justify a traditional loan. In California, a balloon mortgage typically requires a borrower to make regular payments of interest over a certain period of time, and then a final payment of the entire remaining principal balance at the end of the loan period. This balloon payment can be significant, so it’s important to plan ahead and understand the implications of the repayment schedule. Balloon mortgages may also involve adjustable rates, meaning that the rate of interest or payments can change over time. In some cases, borrowers may choose to refinance their balloon mortgage before the end of the loan period. It is important to understand the potential consequences of a refinance in California, since cost and paperwork is involved. A borrower may need to also restructure their loan to make lower payments, or reduce their loan terms in order to lower their monthly payments. It is important to understand the implications of a balloon mortgage before getting into one, and to consider all potential options before making a decision.

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What is a balloon mortgage?

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