REAL 4000 Exam #2; Ryan Dietz Exam
Questions and Answers
Given the following information on an interest-only mortgage, calculate the
monthly mortgage payment: loan amount: $50,000; term: 15 years; interest
rate: 4.2% - -To calculate this, you are looking at interest only.
Take the interest rate (annual) and divide it by 12 so you will have the
monthly rate. 4.2%/12months = 0.35
Now, put that percent into a decimal. 0.35%=.0035
Multiply the loan amount by .0035
Answer: 175
-Suppose a potential home buyer is interested in taking a $200,000
mortgage loan that has a term of 15 years and a fixed mortgage rate of
5.15%. What is the monthly mortgage payment that the homeowner would
need to make if this loan is fully amortizing? - -N: 15*12
I/Y: 5.15/12
PV: -200,000
PMT: CPT
FV: 0
Answer: 1597.26
-For standard adjustable-rate mortgage (ARM) loans, the average industry
margin has been stable at approximately 275 basis points (and as low as
225). 275 basis points are the same as the number - -.275 basis points is a
percent, here we are just changing that to a decimal.
Answer: .0275
-Which of the following clauses requires a borrower to make monthly
deposits into an account in order to pay obligations such as property taxes,
community association fees, or causality insurance premiums? - -Escrow
clause
-When you, as a borrower sign the "mortgage" (conveying to the lender a
security interest in the mortgaged property) you are the - -Mortgagor
-A buyer wants to purchase a home valued at $187,500, and the bank
informs the buyer that if they take a loan over 80% in LTV, they need to
budget for PMI payments. If the buyer wants to avoid PMI, what is the
maximum amount of the loan they can take? - -LTV (Loan to value)
187,500*.80=
Questions and Answers
Given the following information on an interest-only mortgage, calculate the
monthly mortgage payment: loan amount: $50,000; term: 15 years; interest
rate: 4.2% - -To calculate this, you are looking at interest only.
Take the interest rate (annual) and divide it by 12 so you will have the
monthly rate. 4.2%/12months = 0.35
Now, put that percent into a decimal. 0.35%=.0035
Multiply the loan amount by .0035
Answer: 175
-Suppose a potential home buyer is interested in taking a $200,000
mortgage loan that has a term of 15 years and a fixed mortgage rate of
5.15%. What is the monthly mortgage payment that the homeowner would
need to make if this loan is fully amortizing? - -N: 15*12
I/Y: 5.15/12
PV: -200,000
PMT: CPT
FV: 0
Answer: 1597.26
-For standard adjustable-rate mortgage (ARM) loans, the average industry
margin has been stable at approximately 275 basis points (and as low as
225). 275 basis points are the same as the number - -.275 basis points is a
percent, here we are just changing that to a decimal.
Answer: .0275
-Which of the following clauses requires a borrower to make monthly
deposits into an account in order to pay obligations such as property taxes,
community association fees, or causality insurance premiums? - -Escrow
clause
-When you, as a borrower sign the "mortgage" (conveying to the lender a
security interest in the mortgaged property) you are the - -Mortgagor
-A buyer wants to purchase a home valued at $187,500, and the bank
informs the buyer that if they take a loan over 80% in LTV, they need to
budget for PMI payments. If the buyer wants to avoid PMI, what is the
maximum amount of the loan they can take? - -LTV (Loan to value)
187,500*.80=
