Finance
An Iowa commercial property loan with a 5-year term and 25-year amortization means:
AThe loan is fully paid off in 5 years
BPayments are calculated as if amortized over 25 years, but the full balance is due in 5 years✓ Correct
CThe loan cannot be refinanced for 5 years
DThe loan automatically converts to a residential mortgage after 5 years
Explanation
A 5-year term / 25-year amortization commercial loan has monthly payments based on a 25-year amortization schedule, but the entire remaining balance becomes due as a balloon payment at the end of year 5.
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