An interest$-$only loan is also known as a:

a$.$ Zero$-$principal loan

b$.$ Interest$-$heavy loan

c$.$ Bullet loan

d$.$ None of these

Since the loan principal outstanding for a construction loan grows over time, a synonym for this type of loan is:

a$.$ Zero$-$principal loan

b$.$ Interest$-$heavy loan

c$.$ Negative amortization loan

d$.$ None of these

Why do lenders allow interest to accrue on construction loans?

a$.$ To decrease defaults by borrowers on their loans

b$.$ Because the borrower is not be able to pay the interest during the construction process

c$.$ Because the borrower will pay the deferred interest after construction completion

d$.$ All of these

Which loan and amortization schedule is not possible?

a$.30-$year loan with a $30-$year amortization term.

b$.30-$year loan with a $20-$year amortization term.

c$.20-$year loan with a $30-$year amortization term.

d$.20-$year loan with a $21-$year amortization term.

How do you solve for the mortgage constant?

a$.$ Take the reciprocal of the annuity factor

b$.$ Multiply the annuity factor by the loan term

c$.$ Divide the annuity factor by the full principal amount

d$.$ None of these