Mort 202 Grande MOD 1 Questions and Answers 100% Pass
3 views 0 purchase
Course
Mort 202 Grande MOD 1
Institution
Mort 202 Grande MOD 1
Mort 202 Grande MOD 1 Questions and
Answers 100% Pass
Question: What is the primary function of a mortgage in real estate transactions?
Answer: The primary function of a mortgage is to provide a loan to a borrower for
purchasing real estate, with the property itself serving as collateral f...
Mort 202 Grande MOD 1 Questions and
Answers 100% Pass
Question: What is the primary function of a mortgage in real estate transactions?
Answer: ✔✔ The primary function of a mortgage is to provide a loan to a borrower for
purchasing real estate, with the property itself serving as collateral for the loan.
Question: How does the interest rate affect the total cost of a mortgage over its term?
Answer: ✔✔ The interest rate directly impacts the total cost of a mortgage; a higher interest rate
increases the overall amount paid over the term of the loan, while a lower interest rate reduces
the total cost.
Question: What is the significance of the loan-to-value (LTV) ratio in mortgage lending?
Answer: ✔✔ The loan-to-value (LTV) ratio measures the amount of the mortgage loan
compared to the appraised value of the property. It is significant because it helps lenders assess
the risk of the loan; a lower LTV ratio indicates less risk.
Question: What are the main differences between a fixed-rate mortgage and an adjustable-rate
mortgage (ARM)?
1
,Answer: ✔✔ A fixed-rate mortgage has a constant interest rate and monthly payments
throughout the loan term, while an adjustable-rate mortgage (ARM) has an interest rate that may
change periodically based on market conditions, leading to varying monthly payments.
Question: How does a mortgage amortization schedule work?
Answer: ✔✔ A mortgage amortization schedule outlines the repayment plan for the loan,
showing how each payment is split between interest and principal, and how the balance of the
loan decreases over time until it is fully paid off.
Question: What is the purpose of mortgage insurance, and when is it typically required?
Answer: ✔✔ Mortgage insurance protects the lender in case the borrower defaults on the loan. It
is typically required when the borrower's down payment is less than 20% of the property's value,
as the loan is considered higher risk.
Question: What is the impact of prepaying a mortgage on the loan term and interest paid?
Answer: ✔✔ Prepaying a mortgage can shorten the loan term and reduce the total interest paid
over the life of the loan, leading to significant savings for the borrower.
Question: How does a borrower’s credit score affect their mortgage application and terms?
2
, Answer: ✔✔ A borrower’s credit score affects their eligibility for a mortgage and the interest
rate they receive; higher credit scores typically qualify for better rates and terms, while lower
scores may result in higher interest rates or denial of the loan.
Small Business Administration (SBA) ✔✔- the principal government agency concerned with the
financing, operation, and management of small
businesses
Corporate refugee ✔✔- those individuals who flee the bureaucratic environment of big business
by going into
business for themselves
Small Business ✔✔a business which is independently owned
and operated and is not dominant in its field of operations
Business - ✔✔an organization that combines inputs of raw
materials, capital, labor, and management skills to produce useful outputs of goods and services
so as to earn a profit
3
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller StellarScores. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
