Finance
A 'balloon mortgage' is characterized by:
APayments that gradually increase over the life of the loan
BPeriodic payments with a large lump-sum payment due at the end of the loan term✓ Correct
CAn initial period of interest-only payments
DA rate that adjusts annually
Explanation
A balloon mortgage has regular periodic payments (often amortized over 30 years) but with the entire remaining balance due in a large 'balloon' payment at the end of a shorter term (commonly 5 or 7 years). The borrower must pay off or refinance at maturity.
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