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In which one of the following scenarios would you recommend an adjustable-rate mortgage?
One spouse will join the workforce next year, significantly improving the buyers' financial status. ARMs typically start at significantly lower rates.
The longest repayment period for conventional loans is ______.
40 years
Which one of the following statements best describes a balloon mortgage?
A borrower will have to repay the entire low-interest loan’s balance at the end of the loan period.
A balloon mortgage will have a fixed rate for a certain period of time (often between five and seven years), followed by
a "balloon" payment that requires the borrower to repay the entire remaining home loan balance.
Which one of the following statements is true about escrow account requirements?
The lender determines if an escrow account must be established and maintained.
Which of the following is NOT true regarding an FHA loan as compared to conventional financing?
The required mortgage insurance isn’t required for the life of the loan.