Finance
A balloon mortgage requires the borrower to:
APay extra principal each month to retire the loan early
BMake regular payments with a large lump-sum payment due at the end of the term✓ Correct
CFloat the interest rate after 5 years
DPurchase mortgage insurance if LTV exceeds 80%
Explanation
A balloon mortgage has regular (often interest-only or partially amortizing) payments with a large 'balloon' payment of the remaining balance due at a set date.
Related New Jersey Finance Questions
- The NJ Predatory Lending Act (N.J.S.A. 46:10B-22 et seq.) targets which of the following?
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