Fixed-Rate Mortgage Quiz

1. What is a fixed-rate mortgage?

A mortgage with an interest rate that changes annually A mortgage with an interest rate that remains the same for the entire loan term A mortgage with decreasing payments A government-backed loan

2. What are the most common fixed-rate mortgage terms?

10 and 15 years 15 and 30 years 5 and 10 years 20 and 40 years

3. What is the advantage of a 15-year fixed-rate mortgage over a 30-year?

Lower monthly payments Less total interest paid over the life of the loan No down payment required Easier qualification

4. What happens to your monthly payment if market interest rates rise?

It increases It decreases It stays the same with a fixed-rate mortgage It doubles

5. Why do 15-year mortgages typically have lower interest rates than 30-year mortgages?

They are government-backed Less risk for the lender due to shorter term They require larger down payments They are only for first-time buyers

6. What is the trade-off when choosing a 15-year mortgage over a 30-year mortgage?

Higher monthly payments but less total interest Lower monthly payments but more total interest No difference Higher interest rate

7. Can you pay off a fixed-rate mortgage early?

No, you must pay the full term Yes, most fixed-rate mortgages allow early payoff with no prepayment penalty Only after 10 years Only with a balloon payment

8. What is a rate lock in mortgage lending?

A guarantee that your interest rate won't change during the loan process A requirement to accept the first rate offered A fee for locking in a rate A government program

9. Who benefits most from a fixed-rate mortgage?

Investors who want to flip houses Homeowners who plan to stay in their home for a long time and want payment certainty People who expect interest rates to drop Those who want the lowest possible rate

10. What is an escrow payment in relation to a fixed-rate mortgage?

The initial down payment A portion of monthly payment set aside for property taxes and insurance The loan principal The interest payment only

Quiz Results