REE 3043 Exam Questions With Revised
Answers
Fully Amortized Mortgage - answerPeriodic payments that are sufficient enough to cover the
entirety of the loan and the entirety of the interest by the end of the term
Interest only loan - answerMaking payments toward only the interest during the dur...
Fully Amortized Mortgage - answer✔✔Periodic payments that are sufficient enough to cover the
entirety of the loan and the entirety of the interest by the end of the term
Interest only loan - answer✔✔Making payments toward only the interest during the duration of
the loan. At the end the principal is paid as one payment.
Ballon loan - answer✔✔When a loan amortizes over 25 years but the loan matures at year 10.
Used in commercial loans
Reverse mortgage - answer✔✔A loan by which a homeowner receives a lump sum, monthly
payments, or a line of credit based on the homeowner's equity in the property secured by the
mortgage. The loan must be repaid at a prearranged date, upon the death of the owner, or upon
the sale of the property.
ARM- Adjustable rate mortgage - answer✔✔To start a fixed payment is made then interest rate
adjust according to the market. Margin rate stays the same index adjusts
Option ARM - answer✔✔Allows you to decide the amount of your payment. The initial amount
covers interest, remaining goes toward principle
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