California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Practice this question and more.

A purchaser borrows $275,000 to purchase a property for a term of ten years. At the end of that time, what is the payment of $175,000 called?

Final installment
Down payment
Balloon payment
Adjustable payment

The correct answer is: Balloon payment

The payment of $175,000 at the end of the ten years is called a balloon payment. This type of payment is a larger, lump sum payment that is made at the end of a loan term. It is different from a final installment or down payment because those payments are made throughout the loan term, while a balloon payment is only made at the end. An adjustable payment is one that can change throughout the loan term, while a balloon payment is a fixed amount.