Finance
A mortgage in which the borrower pays only interest for a set period before principal and interest payments begin is called a(n):
ABalloon mortgage
BInterest-only mortgage✓ Correct
CNegative amortization loan
DReverse mortgage
Explanation
An interest-only mortgage requires the borrower to pay only interest for a specified initial period (often 5-10 years), after which the loan converts to regular principal-and-interest payments.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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