Personal Finance and Mortgage Terminology Quiz

The total yearly cost of a mortgage expressed as a percentage of the loan amount.

A loan that is backed by collateral, which can be seized by the lender if the borrower defaults.

The portion of the home's purchase price that is paid upfront by the buyer.

There is no widely recognized mortgage type known as a 'stable-rate mortgage'.

The interest rate at which depository institutions lend reserve balances to other depository institutions overnight.

Renting provides the flexibility to move without the responsibility of selling a property.

The ratio of the loan amount to the appraised value of the property, expressed as a percentage.

Insurance that protects the lender in case the borrower defaults on the loan, usually required for borrowers with a down payment less than 20%.

A mortgage loan that exceeds the maximum loan amount set by Fannie Mae and Freddie Mac.

The legal process by which a lender repossesses a property due to the borrower's failure to meet the mortgage terms.

A legal document that details the terms of a mortgage, including repayment terms, interest rate, and any applicable fees.

Insurance required for conventional loans with less than a 20% down payment, protecting the lender in case of borrower default.

A mortgage with an interest rate that can change periodically, usually after an initial fixed period.

The ratio of a borrower's monthly debt payments to their gross monthly income, used by lenders to assess a borrower's ability to manage payments.

A line of credit secured by the equity in the borrower's home, allowing them to borrow against the equity as needed.

A government agency responsible for regulating and enforcing consumer protection laws in the financial sector, including mortgages.

A government agency that insures mortgages, allowing lenders to offer more favorable terms to borrowers with less-than-perfect credit or limited down payments.