Mortgages MCQs Quiz Multiple Choice Questions & Answers

Test Your Skills in Mortgages Quiz Online

Embark on an informative journey through the world of Mortgages with our extensive collection of multiple-choice questions and answers. Whether you're a homeowner navigating the complexities of mortgage financing, a prospective homebuyer exploring loan options, or a financial professional seeking to deepen your knowledge, our repository offers invaluable insights. Delve into topics such as types of mortgages, mortgage calculations, mortgage-backed securities, and mortgage refinancing. Each multiple-choice question is meticulously crafted to challenge your understanding and stimulate critical thinking about the intricacies of mortgage finance. From understanding interest rates and loan terms to analyzing the impact of mortgage default on financial markets, our MCQs provide a comprehensive exploration of all facets of Mortgages. Start exploring today to enhance your understanding and make informed decisions in the realm of real estate finance!

Mortgages Questions with Answers

1. The monthly mortgage payment divided by the loan amount is commonly referred to as the

2. Assume that a borrower has a choice between two comparable fixed-rate mortgage loans with the same interest rate, but different mortgage terms, one being a 30-year mortgage and the other a 15-year mortgage. Under financially unconstrained circumstances, which of the following statements best describes the borrowers preference?

3. For the purposes of estimating the effective borrowing cost (EBC), only those up-front expenses associated with obtaining the mortgage should be included. With this in mind, which of the following costs should not be included in ones calculation of EBC?

4. From the borrowers perspective, the effective borrowing cost is often viewed as the implied internal rate of return (IRR), since it takes into consideration costs that the borrower faces, but which are not passed on as income to the lender. Included in this calculation are closing costs, which may consist of all of the following except

5. Given the following information on a 30-year fixed-payment loan, determine the remaining balance that the borrower has at the end of seven years. Interest Rate: 7%, Monthly Payment: $1,200.

6. Given the following information on a fixed-rate loan, determine the maximum amount that the lender will be willing to provide to the borrower. Loan Term: 30 years, Monthly Payment: $800, Interest Rate: 6%

7. Given the following information on an interest-only mortgage, calculate the monthly mortgage payment. Loan amount: $56,000, Term: 15 years, Interest Rate: 7.5%.

8. Given the following information, calculate the balloon payment for a partially amortized mortgage. Loan amount: $84,000, Term to maturity: 7 years, Amortization Term: 30 years, Interest rate: 4.5%, Monthly Payment: $425.62.

9. Given the following information, calculate the effective borrowing cost (EBC). Loan amount: $166,950, Term: 30 years, Interest rate: 8 %, Payment: $1,225.00, Discount points: 2, Other Closing Expenses: $3,611.

10. Given the following information, calculate the lenders yield. Loan amount: $166,950, Term: 30 years, Interest rate: 8 %, Payment: $1,225.00, Discount points: 2.

11. In considering a three-year-one-year adjustable-rate mortgage (ARM), the interest rate will be fixed for how many years?

12. One reason why adjustable-rate mortgages (ARMs) have become popular has to do with the impact that they have on the interest rate risk that is borne by the parties involved. If interest rates were to rise on a level-payment mortgage (LPM) the interest rate risk of the loan would typically be borne by

13. Partially amortizing mortgage loans require periodic payments of principal, but are not paid off completely over the loans term to maturity. Instead, the balance of the principal amount is paid at maturity in what is commonly referred to as a

14. Recently, 15-year mortgages have increased in popularity amongst both borrowers and lenders. Which of the following groups of borrowers would typically be the least interested in a 15-year mortgage?

15. Required by the Truth-in-Lending Act, the annual percentage rate (APR) is reported by the lender to the borrower on virtually all U.S. home mortgage loans. The APR accounts for all of the following except

16. To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate. This rate is referred to as a(n)

17. When fully amortizing loans call for equal periodic payments over the life of the loan they are known as

18. When lenders charge discount points (prepaid interest) on a loan, what impact does this have on the loans yield?

19. While a variety of loan terms are available in a lenders mortgage menu, the most common loan term on a level-payment mortgage is

20. With the recent popularity of adjustable-rate mortgages (ARM), lenders have begun to offer ARMs with different adjustment periods. Which of the following ARM choices will most likely have the highest initial rate?


Multiple Choice Questions and Answers on Mortgages

Mortgages Multiple Choice Questions and Answers

Mortgages Trivia Quiz

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