Nearpod 4.6 Mortgages: It's a Money Thing. Demystifying Mortgage

What does APR stand for?

(a)  

What is the primary component of the APR?

• The interest rate plus additional costs

• The loan's principal amount

• The loan's term

• The down payment amount

Which type of mortgage rate remains the same throughout the loan term?

• Variable-rate mortgage

• Adjustable-rate mortgage

• Index-rate mortgage

• Fixed-rate mortgage

What is a key advantage of fixed-rate mortgages?

What is the risk associated with adjustable-rate mortgages?

• Stable interest rates

• Increasing interest rates

• Decreasing property value

• Fixed monthly payments

What factor does not directly affect your choice between a fixed-rate and an adjustable-rate mortgage?

• How long you plan to live in the home

• Your future income

• Your financial risk tolerance

• The property's location

What does an amortization schedule show?

• The total interest paid over the loan term

• The decrease in property value over time

• How each payment is split between interest and principal

• The increase in property value over time

What happens to the interest portion of a mortgage payment over time?

• It decreases

• It fluctuates based on the economy

• It stays the same

• It increases

Why is it important to understand mortgage terms before signing? Explain in three sentences.