Definition of Balloon Mortgage:
Orange County Balloon Mortgage:
This is a mortgage loan that normally has a fixed interest rate (usually 10 - 15 years). After this period has ended the borrower is required to either; pay the loan back in full or refinance the entire loan balance – with the existing Orange County lender or through another lender or Orange County mortgage broker. Under normal circumstances a balloon mortgage will carry a lower interest rate than a fully amortized mortgage because the lender is getting their money back so much sooner. This type of real estate financing is not normally used in conforming residential lending – but is more common in commercial real estate purchases.