Finance
A 'balloon mortgage' in NC is characterized by:
APayments that increase annually
BA large lump-sum payment due at the end of a shorter loan term✓ Correct
CInterest-only payments for the full loan term
DA variable rate tied to a floating index
Explanation
A balloon mortgage features regular (often amortized) payments for a set period, followed by a large balloon payment at the end of the term (e.g., 7 years). The balloon payment pays off the remaining principal. Borrowers must then refinance, sell, or pay off the balloon.
Related North Carolina Finance Questions
- A NC 'purchase money mortgage' (PMM) is one where:
- The primary purpose of the Community Reinvestment Act (CRA) is to:
- The debt-to-income (DTI) ratio most commonly used by conventional lenders for total monthly obligations should generally not exceed:
- The 'Dodd-Frank Act' introduced the concept of a 'Qualified Mortgage' (QM). A key feature of a QM loan is:
- A 'second mortgage' or 'junior lien' in NC is characterized by:
- A conventional loan is best described as:
- In North Carolina, which of the following best describes a purchase-money mortgage?
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the down payment is less than:
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