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QUESTION 4 of 10: A loan that starts at a fixed rate for several years, but whose balance is collected in one lump sum when it becomes due
is a:
a) Fixed rate
b) ARM
c) Private mortgage insurance
d) Balloon mortgage
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Answer :

GinnyAnswer

Final answer:

A balloon mortgage is a loan with initial fixed rates but requires a lump sum payment at the end.


Explanation:

A balloon mortgage is a loan that starts at a fixed rate for several years, but the entire balance is due in one lump sum at the end of the loan term. This type of mortgage typically offers lower initial monthly payments but carries the risk of a large final payment.


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