Mortgage Installment Quiz

What is the primary purpose of a mortgage installment?

• To extend the loan term

• To reduce the interest rate

• To increase the loan amount

• To ensure the property serves as collateral for the loan

What does the term 'amortization' refer to?

• The total amount borrowed

• The assessment of interest rates

• The calculation of property value

• The process of gradually paying off a loan

What is included in a mortgage installment payment?

• Only interest charges

• Only principal repayment

• Insurance costs

• Both principal and interest

What is the formula used to calculate the monthly payment for a mortgage?

• M = X / (i + s)

• M = X * i * n

• M = X + i - s

• M = X(i + s)/12

What does 's' represent in the mortgage formula?

• Annual sinking fund

• Total loan amount

• Monthly interest rate

• Loan term in months

What is the significance of the market value assessment in mortgage calculations?

• It determines the interest rate

• It helps in loan approval

• It assesses the borrower's creditworthiness

• It calculates the total loan amount

What is the monthly payment for a loan amount of RM 20,000 at an interest rate of 8.5% over 5 years?

• RM 500.00

• RM 422.94

• RM 600.00

• RM 300.00

What is the role of lenders in mortgage valuations?

• To approve all loan applications

• To increase property values

• To mitigate their risk

• To set interest rates

A borrower can afford a mortgage repayment of RM4,000 per month. If he wishes to

redeem capital over 20 years 9 % interest, what is the maximum amount he

can borrow

• RM438,000

• RM400,000

• RM394,000

Fatihah decides to purchase a bungalow house for RM 1 million. She

can obtain a total loan of RM 800 000 from BIMB with a fixed interest of

8% per annum calculate the monthly installment payable by Fatihah if her loan is

for 30 years