Finance
Which of the following best describes a balloon mortgage?
AA mortgage with payments that increase annually
BA mortgage with a large lump-sum payment due at the end of the loan term✓ Correct
CA mortgage with no down payment requirement
DA mortgage with an interest rate tied to an index
Explanation
A balloon mortgage has regular periodic payments, but at the end of the loan term, the remaining balance is due in a single large (balloon) payment. These loans often have lower initial interest rates.
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