6.3: Mortgage Application Process

Front

What is the assessed value of a home?

Back

The assessed value of a home is the dollar value assigned to a property by a public tax assessor for the purpose of taxation.

Front

How do you calculate property tax?

Back

Property tax is calculated by multiplying the assessed value of the property by the property tax rate (expressed as a percentage).

Front

What is a mortgage payment?

Back

A mortgage payment is a monthly payment made by a borrower to a lender to repay a loan used to purchase real estate.

Front

What components are typically included in a monthly mortgage payment?

Back

A monthly mortgage payment typically includes the principal, interest, property taxes, and homeowner's insurance.

Front

What is a down payment?

Back

A down payment is an upfront payment made by a buyer when purchasing a home, typically expressed as a percentage of the purchase price.

Front

What does APR stand for in mortgage terms?

Back

APR stands for Annual Percentage Rate, which represents the annual cost of borrowing, including interest and fees.

Front

How is total monthly payment calculated when including property taxes and insurance?

Back

Total monthly payment is calculated by adding the monthly mortgage payment, monthly property tax, and monthly homeowner's insurance.

Front

What is the formula to calculate interest paid on a mortgage?

Back

Interest paid on a mortgage can be calculated using the formula: Total Payments - Principal Amount Borrowed.

Front

What is the difference between semi-annual and quarterly payments?

Back

Semi-annual payments are made twice a year, while quarterly payments are made four times a year.

Front

How do you convert an annual property tax rate to a monthly amount?

Back

To convert an annual property tax rate to a monthly amount, divide the annual property tax by 12.