Mortgages and Home Ownership

Question 1

When people take out a mortgage, they must pay back the money

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over time, usually many years.

Question 2

The chart shows the costs associated with the purchase of a new home.

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costs associated with obtaining the loan.

Question 3

If someone buys a home for $200,000 and makes a 20 percent down payment, that person will have to

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pay $40,000 up front.

Question 4

A borrower with bad credit is likely to be charged

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a high interest rate.

Question 5

The chart shows the costs associated with the purchase of a new home.

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fees assessed by the state or local government.

Question 6

Many people prefer a fixed-rate mortgage because it

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is predictable.

Question 7

What is the best reason for homebuyers to create a budget before taking out a mortgage?

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to plan how to pay off the money they have borrowed

Question 8

The chart shows the costs associated with the purchase of a new home.

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There are additional fees and costs involved in taking out a mortgage.

Question 9

The table shows the terms of a fixed-rate mortgage.

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M = P StartFraction Left-bracket R (1 + R) Superscript n Baseline Right-Bracket Over Left-bracket (1 + R) Superscript n Baseline minus 1 Right-bracket EndFraction

Question 10

The image and chart show the terms of a sample balloon payment mortgage.According to the terms of the sample balloon payment mortgage, what will most likely occur at the end of the regular payment term?

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the remaining principal of $173,073 will be due immediately

Mortgages and Home Ownership Answers

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