7-3 Mortgage Terminology Quiz

What is a mortgage?

• A loan given by a financial institution to purchase a residence.

• A fee levied by a local government on moveable items.

• A value assigned to a home by an assessor to determine the property tax.

• An initial payment when something is bought on credit.

What does market value refer to?

• The price a property would sell for on the open market.

• A fee levied by a local government on the assessed value of your home.

• A loan given by a financial institution to purchase a residence.

• A single interest rate for the entire term of a loan.

What is property tax?

• A fee levied by a local government on moveable items you own within its jurisdiction.

• The price a property would sell for on the open market.

• An initial payment when something is bought on credit.

• A single interest rate for the entire term of a loan.

What is real estate tax?

• A fee levied by a local government on the assessed value of your home you own within its jurisdiction.

• A loan given by a financial institution to purchase a residence.

• The price a property would sell for on the open market.

• An initial payment when something is bought on credit.

How is assessed value used?

• To determine the market value of a property.

• To calculate the down payment for a loan.

• To determine the property tax.

• To set the interest rate for a fixed-rate mortgage.

What is a down payment?

• A fee levied by a local government on moveable items.

• The price a property would sell for on the open market.

• An initial payment when something is bought on credit.

• A single interest rate for the entire term of a loan.

What is a fixed-rate mortgage?

• A fee levied by a local government on moveable items.

• A loan given by a financial institution to purchase a residence.

• An initial payment when something is bought on credit.

• A single interest rate for the entire term of a loan.

What is an adjustable-rate mortgage?

• A fixed interest rate home loan that does not change over time.

• A home loan with an interest rate that adjusts over time based on the market.

• A type of insurance that covers property damages.

• A percentage showing how much of your income goes to paying for housing.

What does it mean to foreclose on a property?

• To refinance the mortgage of a property.

• To take possession of a mortgaged property as a result of the mortgagor's failure to keep up with their mortgage payments.

• To purchase homeowner's insurance for a property.

• To set up an escrow account for a property.

What is private mortgage insurance (PMI)?

• A government tax on property purchases.

• An extra expense for borrowers who make a down payment of more than 20% of the purchase price.

• An extra expense for borrowers who make a down payment of less than 20% of the purchase price.

• A type of homeowner's insurance.