Interest rates are influenced by the Federal Reserve System's:

• reserve requirements

• primary lending discount rate

• open market activities

• All choices are correct.

When a loan is amortized, the monthly payments:

• Can change each month

• Remain the same

The purpose of disclosing the annual percentage rate (APR) is to assist consumers in:

• comparing mortgage loans AND seeing one rate that includes both interest and fees

• understanding all the risks of the loan terms

The guidelines that determine if a conventional loan is conforming or non-conforming are set by:

• Fannie Mae AND Freddie Mac

• Fannie Mae AND Farmer Mac

Which type of conventional loans conform to the guidelines set by Fannie Mae and Freddie Mac and thus can be sold on the secondary market?

• conforming loans

• non-conforming loans

Mitch's ARM has an initial rate of 4.3%. The margin is 2%, and the initial index rate is 2.3%. The initial rate will adjust only once every three years. The lifetime cap is 4%. What is the maximum interest rate that Mitch could pay?

• 8.3%

• 6.3%

• 4.3%

• 8.3%

If Emmy has a property worth $320,000 with a $65,000 loan, how much equity does she have in that property?

• $255,000

• $320,000

• $65,000

• $285,000

Private mortgage insurance protects:

• the lender

• the borrower

If the buyer with a low credit score is willing to pay a higher rate of interest, what type of mortgages are they able to get?

• prime mortgages

• reverse mortgages

• subprime mortgages

The FHA ____________ loans for qualified U.S citizens and naturalized residents.

• insures

• funds

• sells

• processes