Mortgages and Home Ownership
Questions|
consequence - Answer-an event or outcome that happens as a result of
previous decisions and actions
credit - Answer-the level of trustworthiness of a borrower
mortgage - Answer-a legal agreement that determines repayment for a
loan used to buy a home or other property
principal - Answer-the amount of money initially borrowed as part of a loan
Based on the information in the graph, what is the most reasonable
prediction? - Answer-Rising home prices in recent years means that more
people will need to take out mortgages.
A borrower with bad credit is likely to be charged - Answer-a high interest
rate
In the chart, closing costs refers to the - Answer-costs associated with
obtaining the loan.
Which formula should be used to correctly calculate the monthly mortgage
payment? - Answer-M= P [R(1+R)^n]/[(1+R)^n-1]
People most likely need to take out a mortgage when they - Answer-are
making a large purchase
What impact might an economic downturn have on a borrower's fixed-rate
mortgage? - Answer-It has no impact because a fixed-rate mortgage
cannot change.
