Key terms

While working with your mortgage company, it’s important to understand the mortgage terms that may be used so you can have a better (and easier) discussion with your mortgage company.

Balloon Mortgage

A mortgage loan with initially low interest payments, but that requires one large payment due upon maturity (for example, at the end of five or seven years).

Buy-down Mortgage

A mortgage loan in which one party pays an initial lump sum in order to reduce the homeowner’s monthly payments.