Finance
A 'balloon mortgage' in Mississippi is characterized by:
AMonthly payments that increase gradually over time
BSmaller regular payments with a large lump-sum payment due at the end of the term✓ Correct
CNo monthly payments during the loan term
DMonthly payments that decrease over time
Explanation
A balloon mortgage has regular (often interest-only or partially amortized) payments with a large lump-sum 'balloon' payment due at the end of the loan term.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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