A balloon mortgage if it can be obtained can be a very risky way to finance a piece of property. Balloon mortgages are generally not available from lenders. If one is obtained it is usually from the seller of the property. A balloon mortgage requires that interest be paid over a period of time and at the end of the set amount of time the entire principle in due. This is very risky because if the borrower is unable to pay the principle at the time or find financing the borrower could lose all the money that is invested in the property.