True or False
Mortgage payments
are structured to pay down the debt over time and automatically build up
equity.
T
True or False
With an interest-only mortgage there is
no periodic amortization and the loan is paid off at maturity with a single
payment called a balloon payment.
T
Multiple Choice
A mortgage product
designed to meet the needs of elderly homeowners by providing an annuity or
line of credit secured by a mortgage to be paid off when the house is sold or
refinanced or the estate probated.
(A)
Negative Amortization
(B)
Revers Annuity Mortgage (RAM)
(C)
Adjustable Rate Mortgage
(D)
None of the Above
B
Multiple Choice
This is a variable
rate payment that is not specifically designed to help the young first time
home owner, it was designed to help the lender cope with purchasing power
losses due to inflation.
(A)
Annual Percentage Rate (APR)
(B)
Adjustable Rate Mortgage (ARM)
(C)
Negative Amortization
(D)
Non of the above
B
True or False
Origination fees are
charged to cover the lender’s costs of processing the application of the loan.
T
True or False
Negative
amortization happens when the principal of the loan is reduced over time.
F: The principal of the loan actually increases due to
the periodic payments being less for the period and the shortfall is then added
to the principal
Multiple Choice
Lender’s true yield
once points and other fees are considered. It is the lender’s IRR assuming the
borrower holds the loan to maturity.
(A)
Points
(B)
Investment Value
(C)
Graduated Payment Mortgage ( GPM)
(D)
Annual Percentage Rate (APR)
D
True or False
Points are loan
charges to lessen the lender’s effective rate of return. Also known as discount
points.
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