Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Which statement about the balloon payment mortgage is not correct? It benefits the banks and essentially becomes long-term mortgage. Banks revise loan contract periodically and
Which statement about the balloon payment mortgage is not correct? It benefits the banks and essentially becomes long-term mortgage. Banks revise loan contract periodically and get more fees: It is good choice for low-income households because the contracts require interest only payments during the interim period, which are lower than the amortized loan monthly payment. The borrowers can always refinance at the end of the balloon loan period. It offers lower interest rates, but they are risky, and are usually used to encourage the homebuyer to buy more house than they can afford with a standard mortgage. It requires fixed monthly interest payments for 3 to 5 years. The full payment of the mortgage principal (the balloon payment) is then required at the end of the period
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started