Finance
What is a 'balloon mortgage' and what risk does it pose to Hawaii borrowers?
AA. A mortgage with increasing payment amounts; common in resort property financing
BB. A mortgage with a large lump-sum payment due at a specified date (typically 5-10 years), with regular payments that may not fully amortize the loan; creates refinancing risk✓ Correct
CC. A government-backed loan program for agricultural landowners
DD. A mortgage with payments that decrease over time as the principal decreases
Explanation
A balloon mortgage has a large final payment due at a specified date (the 'balloon'). Regular payments may be calculated on a longer amortization (e.
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