A mortgage which is amortized for a longer period than the actual term of the loan is best described as what type?

A mortgage that is amortized over a longer period than its actual term is best described as a balloon mortgage. In this type of mortgage, the borrower makes payments based on the amortization schedule, which could be 30 years, for instance, but the loan itself is due in a shorter time frame, such as 5 or 7 years. At the end of the loan term, a lump-sum payment, or "balloon," is required to pay off the remaining balance.

This structure is appealing to borrowers who may not intend to stay in the home for the entire term, or who expect to refinance before the balloon payment is due. The payments are typically lower than they would be in a fully amortizing loan for the same interest rate and term, as they're based on the longer amortization schedule.

The other options, while they represent various mortgage structures, do not share this specific attribute of a shorter loan term with a longer amortization schedule. A hybrid ARM combines features of fixed-rate and adjustable-rate mortgages, a graduated payment mortgage has increasing payments over time, and a fixed period ARM refers to an adjustable-rate mortgage that maintains its rate for a set period before adjusting.