A 'short-term mortgage' (balloon loan) differs from a fully amortizing loan in that the:
Why Balloon loan requires full payoff of the remaining balance at the end of a shorter term rather than complete amortization Is Correct
Answer B: Balloon loan requires full payoff of the remaining balance at the end of a shorter term rather than complete amortization
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related North Carolina Questions
- Which type of mortgage allows the borrower to pay only interest during the loan term, with the full principal due at maturity?Finance
- A 'balloon payment' mortgage in North Carolina requires:Finance
- A buyer secures a 30-year fixed mortgage on a $350,000 NC home with 10% down at 7% annual interest. The loan amount is:Real Estate Math
- Regulation Z (Truth in Lending) requires that the APR (Annual Percentage Rate) in a mortgage advertisement is triggered when a lender advertises which specific credit term?Finance
- Which federal law requires lenders to provide a Loan Estimate within three business days of receiving a mortgage application?Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Math Concepts
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →