Finance
What is 'negative amortization' in a mortgage?
AWhen the property value decreases faster than the loan is paid off
BWhen monthly payments are insufficient to cover interest, causing the loan balance to increase over time✓ Correct
CThe process of paying off a loan early
DA type of variable rate mortgage
Explanation
Negative amortization occurs when a borrower's monthly payment is less than the interest accruing on the loan, causing the unpaid interest to be added to the principal balance, increasing the amount owed.
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