Finance
Which of the following describes a 'balloon payment mortgage'?
AA mortgage where payments increase over time
BA mortgage with smaller regular payments followed by a large final lump-sum payment✓ Correct
CA mortgage with no interest for the first 5 years
DA mortgage with flexible payment amounts each month
Explanation
A balloon payment mortgage has regular (often interest-only or partially amortizing) payments for a specified period, followed by a large 'balloon' payment of the remaining balance due at maturity. This can create risk if the borrower cannot refinance or pay the balloon.
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