Question

a balloon payment is most dangerous for borrowers who: *

want smaller payments at the beginning

want predictable fixed payments

dont plan to keep the loan long - term

cannot afford a large lump - sum payment at the end

a buyer wants to build ownership of a home but cannot qualify for a mortgage yet. which arrangement allows part of her monthly payment to go toward a future purchase?

30 - year mortgage

rent - to - own

fha loan

adjustable rate mortgage

Explanation:

First Question (Balloon Payment)

A balloon payment is a large lump - sum payment at the end of a loan. Borrowers who can't afford this large final payment are at risk. Those wanting smaller initial payments might choose balloon loans but it's not the danger source. Those wanting fixed payments wouldn't choose balloon loans. Those not keeping the loan long - term might refinance or sell, so the danger is for those who can't afford the lump - sum at the end.

A 30 - year mortgage requires mortgage qualification. FHA loan also requires mortgage qualification. Rent - to - own allows a renter to have part of their monthly rent go towards a future purchase of the home, which is suitable for someone who can't qualify for a mortgage yet but wants to build ownership. An adjustable rate mortgage is a type of mortgage and requires qualification.

Answer:

D. Cannot afford a large lump - sum payment at the end

Second Question (Home Ownership Arrangement)