Q 01/05

The word 'mortgage' comes from a Law French term meaning what?

A) Long promise

B) Land bond

C) House debt

D) Death pledge

Answer · why

D) Death pledge

The pledge 'dies' either when the debt is paid or when the borrower defaults and loses the property.

Q 02/05

A buyer who puts 20 percent down has a mortgage with what loan-to-value ratio?

A) 20%

B) 50%

C) 60%

D) 80%

Answer · why

D) 80%

Go above 80 percent LTV in the US or Canada and mortgage insurance is usually required.

Q 03/05

In the early years of a standard amortising mortgage, most of each payment goes toward what?

A) Principal

B) Property tax

C) Interest

D) Insurance

Answer · why

C) Interest

The split flips over time until the last payments are almost entirely principal.

Q 04/05

What is the most common mortgage type in the United States?

A) The 30-year fixed rate

B) The five-year fixed closed

C) The 15-year interest-only

D) The two-year tracker

Answer · why

A) The 30-year fixed rate

Canadians mostly take five-year fixed-rate closed mortgages, and Britons lean toward variable rates.

Q 05/05

What is a mortgage nicknamed when its balance falls due long before its payment schedule ends?

A) A bridge

B) A bullet

C) A balloon

D) A wraparound

Answer · why

C) A balloon

Before the FHA existed, most American mortgages were short balloon loans with big down payments.