Finance
A mortgage with negative amortization means:
AThe loan balance decreases faster than scheduled
BThe monthly payment is less than the monthly interest, causing the loan balance to grow✓ Correct
CThe interest rate adjusts downward over time
DThe borrower's payments are tax-deductible
Explanation
Negative amortization occurs when the monthly payment is not sufficient to cover the accrued interest. The unpaid interest is added to the principal balance, causing the loan amount to increase over time rather than decrease.
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