What is a 'balloon mortgage' and what risk does it pose to Delaware borrowers?
Why A mortgage with regular monthly payments followed by a large lump-sum payment of the remaining balance at a specified date Is Correct
Answer B: A mortgage with regular monthly payments followed by a large lump-sum payment of the remaining balance at a specified date
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related Delaware Questions
- Paired sales analysis is used in appraisal to:Property Valuation
- What is an adjustable-rate mortgage (ARM)?Finance
- Which of the following would appear on a seller's closing statement as a credit?Escrow & Title
- What is the debt-to-income ratio for a Delaware borrower with $1,850 housing payment, $350 car payment, $250 student loan payment, and $6,500 gross monthly income?Real Estate Math
- An investor purchases a Delaware property for $500,000 with a 25% down payment and obtains a mortgage for the balance. Closing costs are $8,000 (paid in cash). What is the investor's total cash investment at closing?Real Estate Math
- What is 'interest-only mortgage' and what are its risks for Delaware borrowers?Finance
- Which type of mortgage requires the borrower to pay only interest for a specified period, after which principal payments begin?Finance
- Private mortgage insurance (PMI) is typically required when a conventional loan has a down payment of less than:Finance
Key Terms to Know
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →