Test: The Mortgage Quiz
Description: Test your knowledge when it comes to Mortgages
Keywords: mortgage, loan, home
A foreclosure can occur if...
the buyer stops making payments on their mortgage
the bank decides to sell the mortgage to another bank
the bank goes out of business
the buyer decides to sell the property
What are the three most common ways for valuing a home?
actual, appraised, and estimated values
estimated, taxed, and actual values
appraised, estimated, and modeled values
modeled, taxed, and actual values
A short sale...
occurs when the proceeds of a sale falls short of the balance of the mortgage
often results in a negative credit report against the property owner
is an alternative to a foreclosure
all the above
A reverse mortgage...
is a type of loan where you can release your equity in your home
occurs during a foreclosure or bankruptcy
is a type of loan where the interest rate is below the prime rate
is available immediately after completing payments on a standard mortgage
With a fixed rate mortgage
you pay an equal amount of interest throughout the life of the loan
you pay an equal amount of principal throughout the life of the loan
you pay an equal amount of taxes and insurance throughout the life of the loan
you pay an equal combined amount for the principal and interest throughout the life of the loan
PMI, or Private Mortgage Insurance, is required when
the downpayment is below 20% of the value
the borrower's credit rating is below 650
the lender is a small local bank
the property is a duplex
An escrow account...
is used to collect and hold funds to pay various home related recurring costs
is a savings vehicle that earns interest as part of a mortgage
reduces your monthly mortgage payment
maintains the title to your home until the mortgage is paid off
Closing costs on average are roughly...
1 to 5% of the price of the mortgage
5 to 10% of the price of the mortgage
fixed no matter the size of the mortgage
10 to 15% of the price of the mortgage
The idea of a mortgage originated in
Prussia in 1769
Denmark in 1849
Germany in 1869
Britian in 1669
The advantage of a bi-weekly vs. a monthly payment plan is that...
you make an additional 1/2 payment each year
your principal payment is less over time
your interest rate is lowered
you make one less payment each year