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Test 45
Test 45: Test 45
Test your understanding of basic mortgage concepts
Question 1: What is the principal in a mortgage?
The original loan amount borrowed to purchase the home
The interest rate charged by the lender
The monthly payment amount
The property tax amount
Question 2: What does PITI stand for in mortgage payments?
Principal, Interest, Taxes, and Insurance
Payment, Interest, Terms, and Installments
Principal, Income, Taxes, and Investment
Property, Insurance, Title, and Interest
Question 3: Which type of loan is guaranteed by the federal government?
Conventional loan
Jumbo loan
FHA loan
Portfolio loan
Question 4: What is amortization in a mortgage context?
The process of applying for a mortgage
The calculation of interest rates
The escrow process for taxes and insurance
The process of spreading loan payments over time
Question 5: What happens to the portion of your payment going to principal over time?
It increases as your loan balance decreases
It decreases as your loan balance decreases
It stays the same throughout the loan term
It is only applied at the end of the loan
Question 6: What is a conforming loan?
A loan that exceeds Fannie Mae and Freddie Mac limits
A loan that meets GSE guidelines including loan limits
A loan with a variable interest rate
A loan that requires no down payment
Question 7: Which loan program allows 100% financing with no down payment?
Conventional loan
FHA loan
VA loan
Conventional loan with PMI
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