What is a Bullet Payment Mortgage?

What is a Bullet Payment Mortgage?

In terms of finance, a Bullet Payment Mortgage is similar to a Balloon Payment Mortgage, in so much as at the end of the terms both require a final payment on the principal. This final lump sum payment is referred to as the ‘bullet payment” if it is a rather small to average sum. Bullet loans are fairly common if not directly called bullet loans outright. Unlike a amortized loan, a bullet loan may be paying only interest, until the final payment when the principal amount is paid in full. Or it may simply delay any payments until the final payment. This delay provides the advantage of not having to immediately pay back the loan.