Custom Mortgages

A partially amortized mortgage is a loan structure that combines the stability of fixed payments with a shorter loan term. In this arrangement, the borrower makes regular monthly payments calculated as if the loan were going to last for a long period, such as 30 years. However, the loan term is actually much shorter, often only five or seven years. Because the payments are not large enough to pay off the entire debt in that short timeframe, a large balance remains unpaid when the term ends. This remaining balance must be paid in full in a single, large lump sum known as a "balloon payment." Borrowers typically plan to refinance the property or sell it before the balloon payment comes due.