Match each type of mortgage to the feature described.

adjustable-rate mortgage

balloon mortgage

hybrid mortgage

fixed-rate mortgage

A large portion of the borrowed

principal is repaid at the end of

the loan.

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Monthly payments adjust

throughout the duration of

the loan.

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Monthly payment will not

increase.

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The monthly payment is initially

at a fixed rate followed by a

variable-rate period.

Balloon mortgage in which a large portion of the borrowed principal is repaid at the end of the loan.

Explanation:

Balloon mortgage is mainly used for short term financing such as for construction project, one example is constructing an industry.

Adjustable rate mortgage, monthly payments adjust throughout the duration of the loan.

Explanation:

In case of adjustable rate mortgage at the end we can may lower amount because as the consumer is taking risk, the bank can reward the customer in this way.

Fixed rate mortgage, monthly payment will not increase.

Explanation:

Fixed rate mortgage can be easily understood and in this mortgage there is little variation from one lender to another lender.

Hybrid mortgage, the monthly payment is initially at a fixed rate followed by a variable rate period.

Explanation:

Hybrid mortgage is mainly taken by homeowner as in hybrid mortgage there is less risk.