Question

Certain terms may NOT be included in a high-cost home loan, including:

A payment schedule that: Will result in _______________ amortization, or Consolidates more than two periodic payments and pays them in advance from the proceeds.
A) Negative
B) Positive
C) Amortizing
D) Interest-only

Answer 1

A high-cost home loan may not include certain terms, such as a payment schedule that will result in amortization or consolidating more than two periodic payments and paying them in advance from the proceeds. An amortizing loan is when each payment includes both principal and interest, resulting in the gradual reduction of the loan balance over time.

Step-by-step explanation:

A high-cost home loan may not include certain terms, such as a payment schedule that will result in amortization or consolidating more than two periodic payments and paying them in advance from the proceeds. (C) Amortizing is the correct term to fill in the blank. In an amortizing loan, each payment made by the borrower includes both principal and interest, resulting in the gradual reduction of the loan balance over time.