Finance
What is an 'interest-only loan' and what are its implications for Illinois borrowers?
AA loan where only interest accrues and no principal is ever paid
BA mortgage where payments cover only interest for an initial period, with no principal reduction; the full principal remains due at the end of the interest-only period✓ Correct
CA mortgage with no interest rate; used only for family loans
DA federal mortgage program where interest is paid by the government
Explanation
An interest-only loan allows borrowers to pay only the interest portion of the mortgage payment for an initial period (typically 5-10 years), after which payments adjust to include principal. During the interest-only period, the loan balance doesn't decrease.
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