Mortgage Math Test

• 20%

• 24%

• 30%

• 25%

Tags

CCSS.7.RP.A.3

• 35%

• 40%

• 45%

• 50%

Tags

CCSS.7.RP.A.3

If a borrower takes an interest-only mortgage of $200,000 at an annual interest rate of 6%, what would be the monthly interest payment?

• $1,000

• $1,200

• $1,500

• $2,000

Tags

CCSS.8.EE.C.7B

Evaluate the following statement: A lower front-end ratio indicates a more financially manageable mortgage relative to the borrower's income.

• True

• False

Tags

CCSS.6.RP.A.3B

• 25%

• 30%

• 35%

• 40%

Tags

CCSS.7.RP.A.3

An interest-only mortgage allows the borrower to pay only the interest for a certain period. What is the primary risk associated with this type of mortgage?

• The principal amount increases over time.

• The interest rate can fluctuate significantly.

• The borrower may face a large balloon payment at the end of the term.

• The monthly payments are higher than with traditional mortgages.

• 25%

• 30%

• 35%

• 40%

Tags

CCSS.6.RP.A.3B

A borrower has a monthly gross income of 6,000. His monthly housing costs are 1,800, and his other monthly debt payments are $600. calculate his back-end ratio.

• 30%

• 35%

• 40%

• 45%

Tags

CCSS.6.RP.A.3B

Interpret the financial health of a borrower with a front-end ratio of 28% and a back-end ratio of 36%.

• The borrower is likely overextended financially.

• The borrower is managing their finances well.

• The borrower should seek immediate financial assistance.

• The borrower's financial health cannot be determined from these ratios alone.

Tags

CCSS.6.RP.A.3B

A borrower is considering an interest-only mortgage to lower his initial monthly payments. Which factor should he also consider as a potential disadvantage?

• Lower total cost of the loan

• Potential for home value appreciation

• Lack of equity building in the initial years

• More flexible repayment options