#1
What is a common advantage of a fixed-rate mortgage?
Monthly payments may fluctuate
Interest rate remains constant for the life of the loan
Interest rate adjusts periodically
Interest rate is usually higher
#2
What does APR stand for in the context of mortgage loans?
Annual Payment Rate
Annual Percentage Rate
Adjusted Payment Ratio
Average Payment Return
#3
What is the typical term length for a standard mortgage loan?
15 years
20 years
25 years
30 years
#4
Which of the following factors does NOT typically affect your credit score?
Payment history
Length of credit history
Marital status
New credit accounts
#5
What is the term for the initial payment made when buying a home, typically expressed as a percentage of the purchase price?
Down payment
Closing costs
Earnest money
Appraisal fee
#6
Which of the following is NOT a common type of mortgage interest rate?
Fixed-rate
Variable-rate
Hybrid-rate
Adjustable-rate
#7
What is the term for a loan where the borrower uses their home equity as collateral?
Personal loan
Unsecured loan
Home equity loan
Cash advance loan
#8
What is typically the minimum credit score required to qualify for a conventional mortgage loan?
#9
What is a common feature of an adjustable-rate mortgage (ARM)?
Fixed interest rate
Interest rate that changes periodically
No closing costs
Longer loan term
#10
What is the debt-to-income (DTI) ratio used for in mortgage lending?
To assess a borrower's ability to repay a loan
To determine the size of the down payment
To calculate property taxes
To estimate homeowner's insurance
#11
What is the purpose of a mortgage underwriting process?
To determine the interest rate
To assess the borrower's creditworthiness
To finalize the sale price
To conduct a property inspection
#12
What is the Loan-to-Value (LTV) ratio used for in mortgage lending?
To calculate property taxes
To assess a borrower's ability to repay a loan
To determine the size of the down payment
To estimate homeowner's insurance
#13
What is private mortgage insurance (PMI) primarily designed to do?
Protect the lender in case of borrower default
Protect the borrower in case of property damage
Reduce the interest rate on the loan
Provide additional funds for home improvements
#14
What is a jumbo mortgage?
A mortgage with a very low interest rate
A mortgage for a high-priced property that exceeds conforming loan limits
A mortgage specifically designed for first-time homebuyers
A mortgage with no down payment required
#15
In mortgage terms, what is a point?
A percentage of the loan amount paid upfront to reduce the interest rate
The interest charged on the loan
A type of loan offered to borrowers with excellent credit
A fee paid to the real estate agent
#16
What is a balloon mortgage?
A mortgage with a very low interest rate
A mortgage for a high-priced property that exceeds conforming loan limits
A mortgage specifically designed for first-time homebuyers
A mortgage with a large final payment after a set period
#17
In mortgage lending, what is a prepayment penalty?
A fee charged for paying off the mortgage early
A fee paid to the real estate agent
A fee for late payment
A fee for property appraisal