Finance
What is 'negative amortization' and when might it occur in a Kansas mortgage?
APaying extra principal each month
BWhen the monthly payment is less than the interest due, causing the loan balance to increase✓ Correct
CA penalty for early payoff
DWhen interest rates fall and the payment decreases
Explanation
Negative amortization occurs when the scheduled loan payment is insufficient to cover the interest due. The unpaid interest is added to the principal, causing the loan balance to grow over time.
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