Finance
A 'balloon mortgage' is characterized by:
AMonthly payments that increase over the life of the loan
BRegular payments over a short amortization period followed by a large lump-sum payment✓ Correct
CAn interest rate that adjusts based on a published index
DA negative amortization feature that increases the principal balance
Explanation
A balloon mortgage features regular monthly payments (often calculated as if they were on a 30-year amortization) but requires a large lump-sum 'balloon' payment at the end of a shorter term (e.g., 5 or 7 years). The balloon payment represents the remaining principal balance.
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