What impact might an economic downturn have on a borrower's fixed-rate mortgage?
It has no impact because a fixed-rate mortgage cannot change
.
Which formula should be used correctly calculate monthly mortgage payment?
Use the formula
P= L[c (1 + c)n] / [(1+c)n – 1]
to calculate your monthly fixed-rate mortgage payments. In this formula, “P” equals the monthly mortgage payment.
What is the best reason for homebuyers to create a budget before taking out a mortgage ??
What is the best reason for homebuyers to create a budget before taking out a mortgage?
to compare the value of their home with that of their neighbors
.
to plan how to pay off the money they have borrowed
.
to set aside enough money to refinance the loan
.
to figure out how long they can stay in their home
.
What best explains the relationship between a borrower's credit score and a down payment requirement quizlet?
What best explains the relationship between a borrower's credit score and a down payment requirement?
Someone with a high credit score may be required to make a lower down payment.
over time, usually many years.
What is an adjustable-rate mortgage quizlet?
Adjustable-Rate Mortgages.
a mortgage with an interest rate that may change one or more times during the life of the loan
. ARMs are often initially made at a lower interest rate than fixed-rate loans depending on the structure of the loan, interest rates can potentially increase to exceed standard fixed-rates.
How much should I spend on a house if I make $100 K?
When attempting to determine how much mortgage you can afford, a general guideline is to multiply your income by at least 2.5 or 3 to get an idea of the maximum housing price you can afford. If you earn approximately $100,000, the maximum price you would be able to afford would be
roughly $300,000
.
What should you not do when buying a house?
- Buy a car before speaking with a mortgage loan officer. …
- Use cash to pay off debt before speaking with a mortgage loan officer. …
- Put an offer on a house without having a full preapproval. …
- Wait until the last minute to get a preapproval.
How do I calculate my mortgage accurately?
- M = the total monthly mortgage payment.
- P = the principal loan amount.
- r = your monthly interest rate. Lenders provide you an annual rate so you'll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. …
- n = number of payments over the loan's lifetime.
What is the math formula for mortgage?
To figure your mortgage payment, start by
converting your annual interest rate to a monthly interest rate by dividing by 12
. Next, add 1 to the monthly rate. Third, multiply the number of years in the term of the mortgage by 12 to calculate the number of monthly payments you'll make.
What type of mortgage adjusts the interest rate?
An adjustable-rate mortgage (ARM)
is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. With an adjustable-rate mortgage, the initial interest rate is fixed for a period of time.
Which is considered a good credit practice?
Which is considered a good credit practice?
Pay more than the minimum amount that is due
. … This table can be used to organize Gigi's credit card balances and payments over 6 months. The annual percentage rate on the credit card is 14%.
For which buyer would a lender most likely approve a $200000 mortgage quizlet?
For which buyer would a lender most likely approve a $200,000 mortgage?
income and total debt
. $20 per year until the loan is paid off. paying bills when they are due.
Which explains why Jacob might examine his credit report?
Which explains why Jacob might examine his credit report? …
to determine if he has a history of good credit
.
You just studied 12 terms!
Why does it take 30 years to pay off $150 000 loan?
Why does it take 30 years to pay off $150,000 loan, even though you pay $1000 a month? … Even though the principal would be paid off in just over 10 years,
it costs the bank a lot of money fund the loan
. The rest of the loan is paid out in interest.
What is the advantage of an adjustable rate mortgage quizlet?
Pros: You get a lower interest rate, you save a lot of money, and you discharge the debt faster. Cons: The monthly payments are much higher. A variable-rate mortgage (also called an Adjustable Rate Mortgage, or ARM)
has an interest rate that rises and falls based on market rates.
What is a feature of having a fixed interest rate mortgage quizlet?
With a fixed-rate mortgage,
the borrower will pay the interest rate agreed to at the outset throughout the entire term of the loan
. No matter how high or low market interest rates go, a borrower who takes out a fixed-rate loan at 7.5%, will continue to pay 7.5% interest until the loan is paid off.
