Finance

An interest-only loan in North Carolina requires the borrower to:

APay principal only for the first 5 years

BPay only the interest portion for a set period with no principal reduction✓ Correct

CMake payments twice a month

DRefinance after 3 years

Explanation

An interest-only loan requires the borrower to pay only interest for an initial period, with no reduction in principal balance during that time.

The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.

A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.

A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.

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