Money Quiz

Mortgage Quiz

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

Press the Submit button to see the results.

External Mortgage Literacy Resources

Mortgage Calculator from bankrate.com
Mortgage Information from Yahoo Finance