Finance
A balloon mortgage requires the borrower to:
AMake increasing monthly payments over the loan term
BPay off the remaining balance in a lump sum at the end of a set term✓ Correct
CPay interest only for the entire loan period
DMake a large down payment equal to 25% of the purchase price
Explanation
A balloon mortgage typically has lower initial payments (often amortized over 30 years) but the remaining balance becomes fully due at a specified date (the balloon date), often 5 to 7 years after origination.
Related Tennessee Finance Questions
- The 'ability-to-repay' rule under Dodd-Frank requires lenders to:
- In Tennessee, 'negative amortization' on a mortgage occurs when:
- A Tennessee borrower takes out a $180,000 mortgage at 6.5% interest. What is the first month's interest payment?
- In a Tennessee seller-financed transaction, the seller acting as lender must be aware that certain federal lending laws such as Dodd-Frank may apply if:
- In Tennessee, a 'second mortgage' is:
- A Tennessee borrower's 'net worth' is calculated as:
- A 'partial release' clause in a blanket mortgage allows a developer to:
- A Tennessee homeowner refinances a $200,000 mortgage. The lender charges 1.5 discount points. How much does the homeowner pay in discount points?
Practice More Tennessee Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Tennessee Quiz →