RESIDENTIAL MORTGAGES EXAM
QUESTIONS AND ANSWERS
Jonathan has a 30-year fixed mortgage. The "30-year" aspect of his mortgage
corresponds to which key term? - Correct Answers -Term
Which type of mortgage would be most suitable for a borrower who is looking for
consistent monthly payments without any fluctuations over the life of the loan? - Correct
Answers -Fixed-Rate Mortgage
Mary has a moderate income and cannot afford a 20% down payment. Which type of
mortgage would likely be most suitable for her? - Correct Answers -Non-Conventional
Loan
Peter has an interest rate on his home loan that changes based on market conditions.
Which type of mortgage does Peter have? - Correct Answers -Adjustable-Rate
Mortgage
What characterizes a jumbo loan in real estate financing? - Correct Answers -A loan
that exceeds the conforming loan limits set by government agencies such as Fannie
Mae and Freddie Mac.
A borrower is considering a conventional mortgage for a home priced at $500,000. If
they want to avoid PMI, what is the minimum down payment they should make? -
Correct Answers -$100,000
How does the payment structure of an interest-only amortizing mortgage change after
the interest-only period? - Correct Answers -Payments include both principal and
interest, often resulting in higher payments.
Which of the following statements is true regarding the risk profile of home equity loans
compared to mortgages? - Correct Answers -Mortgages are considered less risky due
to their longer repayment terms.
A borrower has a $300,000 mortgage with a 30-year full amortization schedule. What
does this imply about their loan repayment? - Correct Answers -The borrower will repay
the entire loan amount, including both principal and interest, by the end of the 30-year
term.
