Question

Partially amortizing mortgage loans require periodic payments of principal, but are not paid off completely over the loan's term to maturity. Instead, the balance of the principal amount is paid at maturity in what is commonly referred to as a:_______________.

Answer 1

Answer:

A. balloon payment

Explanation:

Based on the information provided within the question it can be said that the term being described is known as a balloon payment. In this context, balloon payment refers to paying back the outstanding principal sum that must be made at the end of a loan period (maturity), with the interest only having been paid at the time of paying this sum.