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andrew11
2 months ago
10

Caroline has been paying her mortgage steadily for fifteen years. She has just received a notice from her lender that the loan d

ue date is approaching and she will owe a lump sum of $11,257 to pay off her mortgage loan. Which type of promissory note has Caroline NOT been paying?
Business
1 answer:
harina [3.8K]2 months ago
7 0

Answer: A balloon payment note

Explanation: A balloon mortgage is one where the loan does not fully amortize by the end of its term, leaving a remaining balance to be paid at maturity. The concluding payment is termed a balloon payment due to its large size. Such loans are more frequent in commercial real estate compared to residential sectors. A balloon loan requires a lump sum final payment to settle the loan. Instead of structured monthly payments that chip away at the debt, smaller monthly payments are made, which do not suffice to extinguish the balance by the due date, necessitating a substantial final "balloon" payment to clear the remaining debt.

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