Mortgage Quiz - Test your mortgage knowledge

Mortgage Quiz

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Question 1: If your want your payment to remain the exact same amount every month for the life of your loan, what kind of loan would you apply for?
30-year fixed loan
30/15 balloon loan
5/1 Libor ARM
2/28 ARM

Question 2: The credit records of borrowers have three individual FICO scores. Which FICO score is most commonly used to qualify the borrower(s)?
the minimum of the 3 scores
the maximum of the 3 scores
the middle of the 3 scores
the average of the 3 scores

Question 3: A balloon payment is:
the origination fee of a baloon mortgage
a large down payment of a baloon mortgage
the final lump sum payment that is made at the maturity date of a balloon mortgage
none of the above

Question 4: If a borrower's home is worth $200,000 and they wish to borrow $50,000 then the loan-to-value is:
100%
50%
25%
75%

Question 5: When you pay "points", you pay interest in a lump sum upfront to get a lower rate on your fixed rate mortgage. Each point costs:
1% of the mortgage amount.
.1% of the mortgage amount.
2% of the mortgage amount.
10% of the mortgage amount.

Question 6: Which of the following is an excellent credit score?
930
780
660
540

Question 7: When escrow is used in a mortgage payment, what is usually covered in the payment?
principal, taxes, home insurance
principal, taxes
principal, taxes, interest
principal, taxes, interest, home insurance

Question 8: A 'package mortgage' is:
another name for a baloon mortgage
a mortgage covering both real and personal property
a mortgage that does not require PMI
a mortgage that allows the lender to share in part of the income or resale proceeds

Question 9: A down payment more than 20% on a home helps you:
qualify for a better interest rate
build equity in your home
avoid private mortgage insurance
all of the above

Question 10: A reverse mortgage is:
a mortgage used by the elderly that provides income as long as they live
a mortgage that allows the lender to share in part of the income or resale proceeds
a mortgage used to finance the purchase of a property
a residential loan with a fixed interest rate that is below market, with the lender entitled to a specified share of appreciation of the property over an agreed upon time interval

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