Finance
A balloon mortgage requires the borrower to:
AMake increasing payments each year
BPay only interest for the entire term
CMake regular payments and then pay a large lump sum at the end of the term✓ Correct
DPay points upfront in exchange for lower monthly payments
Explanation
A balloon mortgage requires regular payments (often interest-only or partially amortized) and then a large final 'balloon' payment of the remaining balance at the end of the loan term.
People Also Study
Related Georgia Questions
- A Georgia borrower's lender requires a property tax and insurance escrow account. This type of account:Finance
- A lender requires a borrower to get 'private mortgage insurance' (PMI) because the LTV is 90%. If the home value drops 5% after purchase, the LTV becomes:Finance
- The priority of liens against Georgia real property is generally determined by:Escrow & Title
- A borrower's gross monthly income is $7,500. Using a 28% front-end ratio, what is the maximum monthly PITI payment the lender would approve?Real Estate Math
- FHA mortgage insurance (MIP) is paid by the borrower and protects:Finance
- A home equity loan differs from a HELOC in that:Finance
- A mortgage that allows the borrower to draw funds up to a set limit during a draw period is called:Finance
- A lender who charges an interest rate of 6.5% on a mortgage and the APR is 6.9% means:Finance
Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Study This Topic
Practice More Georgia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Georgia Quiz →