Partially amortizing mortgage loans require periodic payments of principal, but are not paid off completely over the loan's term to maturity. Instead, the balance of the principal amount is paid at maturity in what is commonly referred to as a:
A) balloon payment
B) early payment
C) up-front payment
D) payment cap

Question

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A partially amortizing mortgage loan requires the borrower to make periodic payments of principal, but the loan is not fully paid off by the end of the term. Instead, a balloon payment is required at maturity, which is the final payment of the remaining balance of the principal amount. This payment is larger than the previous periodic payments and is intended to fully pay off the outstanding principal.

Partially Amortizing Mortgage Loans Require Periodic Payments of Principal, but Are