Finance
A balloon mortgage in Alaska is characterized by:
AFixed payments that gradually pay off the entire balance
BRelatively low periodic payments followed by a large lump-sum payment at the end of the term✓ Correct
CInterest-only payments for the life of the loan
DPayments that increase annually at a fixed rate
Explanation
A balloon mortgage features smaller regular payments (sometimes interest-only) with a large 'balloon' payment of the remaining principal due at the end of a relatively short term.
People Also Study
Related Alaska Questions
- A borrower in Alaska obtains a $300,000 mortgage at 6% interest with a 30-year amortization. The approximate monthly payment for principal and interest is:Finance
- Which type of mortgage loan is characterized by a fixed interest rate and equal monthly payments that fully repay the loan over its term?Finance
- A 'graduated payment mortgage' (GPM) in Alaska is characterized by:Finance
- A borrower in Alaska has a $175,000 mortgage. After 1 year of making monthly payments, the principal balance has decreased by $3,600. The LTV ratio on a property now worth $225,000 is:Real Estate Math
- An Alaska buyer obtains a $380,000 mortgage. Monthly P&I payment is $2,394. Of the first payment, $1,806 is interest. How much principal is reduced?Real Estate Math
- A borrower in Alaska who makes a voluntary additional principal payment on their mortgage will:Finance
- An Alaska buyer obtains a 30-year, $240,000 mortgage at 7% annual interest. What is the first month's interest payment?Real Estate Math
- A buyer makes a 5% down payment on a $380,000 Alaska home. What is the mortgage amount?Real Estate Math
Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Study This Topic
Practice More Alaska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →