Mortgages PRE TEST

What three costs contribute to the total cost of a mortgage?

• down payment, mortgage tax, and monthly interest

• closing cost, down payment, and monthly loan payment

• closing cost, monthly interest, and starting deposit

• starting deposit, monthly interest, and mortgage tax

Tags

CCSS.7.RP.A.3

Why would a home buyer choose an adjustable-rate mortgage?

• The borrower can adjust the monthly payment depending on his or her income.

• The initial interest rate on an adjustable-rate mortgage is typically lower than the rate on a fixed-rate mortgage.

• The monthly payment doesn’t change for the entire duration of the loan.

• The borrower can make a down payment and pay the remaining loan amount at the end of the loan period.

What is a mortgage?

• a loan used to purchase a home where the property serves as the borrower’s collateral

• a loan used to purchase a vehicle where the vehicle serves as the borrower’s collateral

• a loan used for personal use that does not require the borrower to make a down payment

• a loan used to pay for home renovation that does not require the borrower to make a down payment

What is collateral?

• the money used for a down payment on a loan

• the assets used to secure a loan

• the closing costs associated with obtaining a loan

• the lien filed by the lender

A large portion of the borrowed principal is repaid at the end of the loan.

• balloon mortgage

• adjustable-rate mortgage

• fixed-rate mortgage

• hybrid mortgage

A Balloon Mortgage is A large portion of the borrowed principal is repaid at the end of the loan.

• A large portion of the borrowed principal is repaid at the end of the loan.

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  Monthly payments adjust throughout the duration of the loan.

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  Monthly payment will not increase.

• The monthly payment is initially at a fixed rate followed by a variable-rate period.

Monthly payments adjust throughout the duration of the loan.

• balloon mortgage

• adjustable-rate mortgage

• fixed-rate mortgage

• hybrid mortgage

Monthly payment will not increase.

• balloon mortgage

• adjustable-rate mortgage

• fixed-rate mortgage

• hybrid mortgage

Tags

CCSS.HSF.IF.B.4

The monthly payment is initially at a fixed rate followed by a variable-rate period.

• balloon mortgage

• adjustable-rate mortgage

• fixed-rate mortgage

• hybrid mortgage

Determine who is in the best situation to use that loan.

Jillian is a veteran looking to purchase her first home, but she doesn’t have a down payment.

• VA loan

• FHA loan

• USDA loan