Home Ownership and Investments Quiz

Subprime loans are very safe.

• True

• False

The amount of the down payment one makes on a home directly affects the size of the monthly payment.

• True

• False

Interest rates on mortgages do not vary from bank to bank.

• True

• False

A variable rate mortgage is always fixed.

• True

• False

Graduated payments let the borrower pay more at the beginning of the mortgage and make lower payments later.

• True

• False

A point is 1% of the amount of the loan.

• True

• False

Points are to be paid off as part of the regular monthly payment.

• True

• False

The total of all monthly payments plus the amount of the mortgage equals the total cost of interest.

• True

• False

Interest is equal to principal times rate divided by time.

• True

• False

The reduction of principal each month is equal to the payment minus the interest.

• True

• False