WorksheetsMortgages
Total questions: 10
Worksheet time: 5mins
What incentive do banks have for lending money to homebuyers?
They expect homebuyers to default on their loans
They expect to profit from the interest of the loans
They expect to profit as the val of the home rises
They expect to profit when the home buyer sells her house
Mortgages with shorter terms have higher monthly payments. Why would anyone want a short-term mortgages?
You pay less in principal in total
You pay less interest in total
You pay less in property taxes in total
You pay less in insurance and processing fees
Tim describes a mortgage as an investment. What is an investment?
A kind of loan with high interest
A way to acquire property
A way to buy things in monthly installments
A way to grow your money over time
If you are unable to repay your mortgage, what is the most likely result?
The bank might sell your home to recover its investment
You might have to go to prison
The bank might force you to take out an additional loan
The bank might take all they money and goods you own
Which of the following will a bank consider in its decision to approve you for a mortgage?
Your ethnic background
Your religion
Your salary
Your hobbies
If you have a mortgage with a 20-year terms, how many payments will you probably have to make?
20
200
240
360
What can you infer from the fact that banks require a down payment on a mortgage?
They want to increase the amount of money they loan
They want to make sure the borrower will not walk away from the loan
They want to increase they amount of interest on the loan
They want to get their hands on as much cash as possible
What is one of the advantages to making a larger down payment?
You will need a smaller loan
You will need a bigger loan
You will need a higher interest rate
You will need a lower intererest rate
If, one month, you decide to pay your bank more than the amount you owe on a fixed 30-year mortgage, how would this affect your loan?
It would decrease the time you have left before your morgage is paid off
It would decrease the amount of money you owe to your bank each month
It would decrease the amount of interest you owe on the following month's payment
It would increase the amount of principal you owe to the bank each month
What is the most likely reason for borrowers to default on a mortgage?
They can't afford the down payment
They find another house they like better
They've built up enough equity to sell the house
They can no longer afford the monthly payments
