Mortgages

What is mortgage?

• A type of savings account for future home buyers

• A financial product used to purchase real estate, where the property acts as collateral

• An insurance policy covering home repairs

• A short-term loan for home renovations

How does a downpayment affect a mortgage?

• It decreases the amount of money to be borrowed

• It increases the total interest paid over the life of the loan

• It does not affect the mortgage in any way

• It guarantees an adjustable-rate mortgage

Which of the following factors can influence the interest rate on a mortgage?

• The color of your house

• The location of the nearest park

• Your credit score

• The type of furniture purchased for the home

What does the term 'term' refer to in a mortgage loan?

• The color scheme of the home interior

• The duration over which the loan must be repaid

• The type of insurance associated with the mortgage

• The ability to rent the property

Why might someone choose a 15-year mortgage over a 30-year mortgage?

• Can save money on interest over the life of the loan

• It allows for the purchase of a commercial property

• It requires a smaller legal review

• It provides the option for government-backed refinancing

What is one potential risk of selecting an adjustable-rate mortgage?

• The risk of being unable to change the landscaping

• The interest rate may decrease too much

• The interest rate may increase too much

• The inability to transfer the mortgage to another property