PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM GLOSSARY
A balloon mortgage requires a substantial final payment because the periodic payment schedule does not reduce the principal to zero by the loan's maturity date.
Financing
Mortgage repayment
Define, distinguish, apply, retrieve
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PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEBuild the complete exam definition
Learn the rule, separate it from the nearest distractor, then apply it to a Georgia fact pattern.
What does Balloon mortgage mean?
A balloon mortgage requires a substantial final payment because the periodic payment schedule does not reduce the principal to zero by the loan's maturity date.
How do you separate the nearest exam answer?
A fully amortizing loan reaches a zero balance at term. A balloon loan matures before the amortization schedule would fully repay the debt.
What changes or stays the same in Georgia?
Georgia's use of a security deed does not change the repayment concept. The note controls the balloon maturity and payment obligation.
Payments are calculated on a 30-year amortization schedule, but the note matures in seven years, leaving the remaining principal due then.
A large final payment does not necessarily mean the borrower missed payments. It may be built into the original loan structure.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDERetrieve the rule under exam conditions
Answer before reading the explanation. Then explain why every distractor belongs to a different term.
A buyer's loan payments are set on a 30-year schedule, but the note says all remaining principal is due at the end of year 7. The buyer has never missed a payment. What happens at year 7?
- A
The lender extends the term to 30 years
- B
A large final payment of the remaining balance is due
- C
The lender accelerates the loan for default
- D
Nothing more is owed, since payments were on time
This is a balloon mortgage: the payment schedule does not pay off the loan by maturity, so the remaining principal comes due in one lump sum. That payment is built into the loan terms. It is not acceleration, which follows a default, and this buyer has not defaulted.
Mark each box only when you can perform the skill without looking.
I can define the term in one precise sentence.
I can separate it from the closest look-alike.
I can explain the Georgia rule or confirm that the national rule applies.
I can answer the practice check and explain every option.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEConnect the term to the wider exam
Use these relationships to move from isolated recall to a connected exam model.
Financing complete lesson
https://www.passgeorgiarealestate.com/study-guide/financing/basic-loan-concepts
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