29
QuizMultiple Choice

Mortgages and Home Ownership — Unit test

Question 29 • Personal Finance - EL3403

Borrowers taking a balloon payment mortgage most likely

Answer
A
plan to rent out their homes.
B
must repay the loan in five to ten years.
C
are unwilling to accept any risk in borrowing money.
D
remain in their homes for 30 years or more.

Explanation

A balloon payment mortgage has a large final payment due after a relatively short loan term, often five to ten years. The borrower must pay off the remaining balance at that point, usually by refinancing or selling the property. So the best choice is “must repay the loan in five to ten years.”

AI-written and checked against the verified answer.

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