Mortgage Practice

Front

What is a mortgage?

Back

A mortgage is a loan specifically used to purchase real estate, where the property serves as collateral for the loan.

Tags

CCSS.L.11-12.4C

CCSS.L.6.4C

CCSS.L.7.4C

CCSS.L.8.4C

CCSS.L.9-10.4C

Front

What does 'down payment' mean?

Back

A down payment is the initial amount of money paid upfront when purchasing a home, typically expressed as a percentage of the total purchase price.

Tags

CCSS.RI.11-12.3

CCSS.RI.11-12.5

CCSS.RI.8.3

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Front

How do you calculate the total payment on a mortgage?

Back

Total payment = Monthly payment x Number of months in the loan term.

Front

What is the significance of the interest rate in a mortgage?

Back

The interest rate determines how much extra money will be paid on top of the principal amount borrowed over the life of the loan.

Tags

CCSS.7.RP.A.3

Front

What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage?

Back

A fixed-rate mortgage has a constant interest rate throughout the loan term, while an adjustable-rate mortgage has an interest rate that may change at specified times.

Front

How is the monthly payment on a mortgage calculated?

Back

Monthly payment is calculated using the loan amount, interest rate, and loan term, often using a mortgage calculator or formula.

Tags

CCSS.8.EE.C.7B

Front

What does 'amortization' mean in the context of mortgages?

Back

Amortization is the process of paying off a loan over time through regular payments that cover both principal and interest.

Front

What is the purpose of mortgage insurance?

Back

Mortgage insurance protects the lender in case the borrower defaults on the loan, often required for loans with a down payment less than 20%.

Front

What is equity in a home?

Back

Equity is the difference between the market value of a home and the amount still owed on the mortgage.

Tags

CCSS.6.NS.C.7C

Front

What is a loan term?

Back

The loan term is the length of time over which the loan must be repaid, commonly 15, 20, or 30 years.