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Test: The Mortgage Quiz

Category: Education

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

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