Finance
What is a 'balloon payment' mortgage?
AA loan with payments that increase each year
BA loan with regular periodic payments that do not fully amortize it, with the remaining balance due as a large lump sum at the end✓ Correct
CA loan used exclusively for construction
DA loan that inflates with market conditions
Explanation
A balloon payment mortgage has regular payments (often interest-only or partially amortizing) with the entire remaining balance due at the end of the loan term. Borrowers often refinance or sell before the balloon payment comes due.
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