Finance
A 'short-term mortgage' (balloon loan) differs from a fully amortizing loan in that the:
AInterest rate is higher for a fully amortizing loan
BBalloon loan requires full payoff of the remaining balance at the end of a shorter term rather than complete amortization✓ Correct
CBalloon loan has no interest charges
DFully amortizing loan has a balloon payment
Explanation
A balloon loan has scheduled payments (often calculated on a 30-year amortization) but requires the remaining unpaid balance to be paid in full at the end of a shorter term (e.g., 5 or 7 years).
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