Amortization Term refers to the period over which a loan or debt is scheduled to be paid off through periodic payments. The full amortization term dictates the timeline within which the principal and interest are settled.
A balloon mortgage is a type of loan that does not fully amortize over its term, leaving a balance due at the end of the period in a balloon payment. This large, lump-sum payment can be a surprise for borrowers who are not prepared or aware of this structure.
A balloon payment is the final and often significantly large payment on a loan, typically required after a series of smaller installment payments. It clears the remaining debt owed on the loan.
A partially amortized loan is a type of loan that includes a regular payment schedule over a set period but does not fully pay off the principal within that time, resulting in a balloon payment at the end of the term.
A term mortgage is a type of mortgage that matures, or comes due, after the lapse of a pre-agreed-upon period of years, typically ranging from one to ten years.
