Finance
Which of the following best describes a 'balloon mortgage'?
AA loan with payments that increase each year
BA loan with a large final payment due after a specified period✓ Correct
CA loan that expands to include property taxes and insurance
DA loan with no principal payments for the first five years
Explanation
A balloon mortgage has relatively low payments (often interest-only or based on a long amortization) but requires a large lump-sum payment at the end of a short term (e.g., 5 or 7 years), at which point the borrower must pay off or refinance.
Related Alaska Finance Questions
- A 'construction-to-permanent' loan in Alaska is primarily used for:
- Which of the following best describes a 'short sale' in Alaska?
- Under Alaska Housing Finance Corporation (AHFC) programs, what type of property typically qualifies for financing?
- The discount points paid by a borrower at closing primarily serve to:
- In Alaska, what is a 'wrap-around mortgage'?
- What does 'points' mean in the context of Alaska real estate financing?
- An Alaska lender requires title insurance as a condition of making a mortgage loan. The cost is typically paid by:
- What does 'assumption of mortgage' mean in an Alaska real estate transaction?
Practice More Alaska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →