Mortgages and Home Ownership
Exam Questions & Answers (Grade
A+)
mortgage -
correct answer ✅a legal agreement between a person and a bank
that determines repayment for a loan used to buy a home or other
property. a borrower agrees loan amount, interest rate, and
payment term. they pay it back over years. they can be over 30
years. they should make up no more than 20-25% of budget
consequence -
correct answer ✅a legal agreement that determines repayment
for a loan used to buy a home or other property
credit -
correct answer ✅the level of trustworthiness of a borrower
principal -
correct answer ✅the amount of money initially borrowed as part
of a loan. include the full price of the house and additional fees
down payment -
correct answer ✅an initial payment made when something is
bought on credit. its used for mortgage. its determined by credit
score and type of loan.
, Mortgages and Home Ownership
Exam Questions & Answers (Grade
A+)
5-20% of price
point -
correct answer ✅a one time fee that a borrower can pay to lower
the interest rate. the cost of a point also equals one percent of the
loan amount. points can lower the interest rate in varying amounts
affect monthly payment -
correct answer ✅down payment
interest rate
loan amount
loan term
Types of Mortgages -
correct answer ✅Fixed rate
adjustable rate
balloon payments
formula for monthly payment -
correct answer ✅M=P [R(1+R)^n]/ [(1+R)^n-1]
Exam Questions & Answers (Grade
A+)
mortgage -
correct answer ✅a legal agreement between a person and a bank
that determines repayment for a loan used to buy a home or other
property. a borrower agrees loan amount, interest rate, and
payment term. they pay it back over years. they can be over 30
years. they should make up no more than 20-25% of budget
consequence -
correct answer ✅a legal agreement that determines repayment
for a loan used to buy a home or other property
credit -
correct answer ✅the level of trustworthiness of a borrower
principal -
correct answer ✅the amount of money initially borrowed as part
of a loan. include the full price of the house and additional fees
down payment -
correct answer ✅an initial payment made when something is
bought on credit. its used for mortgage. its determined by credit
score and type of loan.
, Mortgages and Home Ownership
Exam Questions & Answers (Grade
A+)
5-20% of price
point -
correct answer ✅a one time fee that a borrower can pay to lower
the interest rate. the cost of a point also equals one percent of the
loan amount. points can lower the interest rate in varying amounts
affect monthly payment -
correct answer ✅down payment
interest rate
loan amount
loan term
Types of Mortgages -
correct answer ✅Fixed rate
adjustable rate
balloon payments
formula for monthly payment -
correct answer ✅M=P [R(1+R)^n]/ [(1+R)^n-1]
