Real Estate and Mortgage Quiz

Define the term 'Market Value' as it relates to housing/mortgages.

Define the term 'Appraisal' in the context of housing/mortgages.

Explain what 'Down payment' means in the context of purchasing a house.

Define 'Annual Percentage Rate' as used in mortgage discussions.

Define 'Ernest Money' in real estate transactions.

What does 'Fixed Interest' mean in terms of a mortgage?

Define 'Foreclosure' in the context of mortgages.

What is a "Fixed Rate Mortgage"?

• A mortgage with a variable interest rate.

• A loan where the interest rate changes based on market conditions.

• The same rate of interest is paid for the life of the loan.

• A mortgage that can be paid off at any time without penalty.

Imagine Elijah takes out a mortgage to buy a house, choosing the longest repayment period offered. The downside of this decision is that the longer Elijah has the mortgage, the more _____.

• collateral that is required by the bank

• risk of defaulting on the mortgage

• equity will build after seven years

• total amount of interest paid

Kate and Ashton have been approved for a $200,000 15-year mortgage with an APR of 5.5%. How much of their first monthly payment will go to interest?  $I=P\left(APR\right)\left(t\right)$  

• $1,634.17

• $916.67

• $1,147.57

• $717.50