Question

Iris is looking for a short-term mortgage that will allow her to pay fixed payments at a relatively low fixed interest rate during the life of the mortgage and one large payment at the end of the term. What kind of mortgage should Iris take?

a. A balloon-payment mortgage
b. A VA mortgage
c. A conventional mortgage
d. A graduated-payment mortgage

Answer 1

Iris should take a balloon-payment mortgage. This type of mortgage allows her to make fixed payments at a low fixed interest rate during the term of the mortgage and make a large payment at the end of the term.

Step-by-step explanation:

Iris should take a balloon-payment mortgage to fulfill her requirements. A balloon-payment mortgage allows the borrower to make fixed payments at a low fixed interest rate during the term of the mortgage. At the end of the term, the borrower is required to make a large payment, known as the balloon payment, to pay off the remaining balance. This type of mortgage is suitable for those who plan to sell the property or refinance before the balloon payment is due.