Finance
A balloon mortgage requires the borrower to:
AMake increasing payments over the life of the loan
BPay off the remaining loan balance in a lump sum at the end of the loan term✓ Correct
CMake interest-only payments throughout the loan term
DPay a penalty for paying off the loan early
Explanation
A balloon mortgage has a large lump-sum payment (the 'balloon') due at the end of the loan term. Monthly payments may be based on a 30-year amortization, but the remaining balance comes due after a shorter term (e.g., 5 or 7 years).
Related Iowa Finance Questions
- An Iowa home buyer's lender requires title insurance as a condition of the loan. Which policy does the lender require?
- In Iowa, a wraparound mortgage is best described as:
- A buyer obtains a $240,000 mortgage. The lender charges 1.5 discount points. What is the total cost of the points?
- A balloon mortgage in Iowa requires the borrower to:
- A conventional Iowa mortgage loan that conforms to Fannie Mae/Freddie Mac guidelines is called a:
- The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating based on all of the following EXCEPT:
- Iowa's Farm Credit Services of America provides which type of financing for Iowa real estate?
- What type of mortgage requires the borrower to pay only interest for a set period, after which full principal and interest payments begin?
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →