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John Mark, Accountant

Category: Finance

Satisfied Customers: 841

Experience: ACCA

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1. The total of all the monthly payments plus the amount of

Customer Question

1. The total of all the monthly payments plus the amount of the mortgage is equal to the total cost of interest. (Points: 2) True False

2. A mortgage of $80,000.00 with 2 points means the borrower must pay $800.00 at the loan closing. (Points: 2) True False

3. Not all mortgages are paid on a monthly basis. (Points: 2) True False

4. Monthly payments are the fastest way to pay off a home mortgage. (Points: 2) True False

5. Amortization is not a payment process. (Points: 2) True False

6. Amortization is a means of computing how much of each monthly payment is applied to the outstanding principal. (Points: 2) True False

7. The primary mortgage on a home is called the: (Points: 2) first mortgage collateral FNMA real mortgage none of the above

8. Land or anything permanently attached to the land is termed: (Points: 2) collateral FNMA real property personal property none of the above

9. Points represent: (Points: 2) monthly payments an additional cost of financing 2 percent of the amount borrowed a 3 percent up front payment none of the above

10. Donald purchased a home for $250,000.00. He put down 25 percent of the purchase price. The mortgage was at a rate of 5.50% for 30 years. By using Table 12-1 in the textbook, what were his monthly payments? (Points: 2) $1,056.00 $1,240.00 $1,065.00 $1,420.00 none of the above

11. Brian bought a new ranch style home for $180,000.00. Brian made a 30 percent down payment. Assuming a rate of 6.5% on a 30 year mortgage, Brian's monthly payment is: (Use the tables in the textbook.) (Points: 2) $1,783.80 $1,982.00 $594.60 $796.32 none of the above

12. Derek purchased a home for $225,000.00 with a down payment of $30,000.00 at 8.75% for 25 years. Since then the rate has fallen to 5.25%. How much less would his monthly payment be if he purchased the house with the mortgage at 5.25%? (Use Table 15-1 in the textbook.) (Points: 2) $443.58 $434.85 $443.85 $434.58 none of the above

13. "One point" represents: (Points: 2) 1 percent of the amount borrowed. 1 payment per month. 1 additional percent for every $10,000 borrowed. 1 percent per month additional charge. none of the above

14. Chuck purchased a home in Texas for $240,000.00. He made a down payment of 20 percent and obtained a mortgage for 25 years at 6%. What amount of his first payment of $1,236.48 applied to interest? (Points: 2) $276.48 $1,236.48 $960.00 $136.00 none of the above

15. The difference between the monthly payments on a $95,000.00 mortgage at 5% versus 6% for 25 years is: (Use Table 12-1 in the textbook.) (Points: 2) $56.05 $65.05 $56.50 $56.60 none of the above

1. The total of all the monthly payments plus the amount of the mortgage is equal to the total cost of interest. False

2. A mortgage of $80,000.00 with 2 points means the borrower must pay $800.00 at the loan closing. False

3. Not all mortgages are paid on a monthly basis.True

4. Monthly payments are the fastest way to pay off a home mortgage.False

5. Amortization is not a payment process. True

6. Amortization is a means of computing how much of each monthly payment is applied to the outstanding principal.True

7. The primary mortgage on a home is called the:

first mortgage,

collateral,

FNMA,

real mortgage,

none of the above

8. Land or anything permanently attached to the land is termed:

collateral,

FNMA,

real property,

personal property

none of the above

9. Points represent:,

monthly payments

an additional cost of financing,

2 percent of the amount borrowed,

a 3 percent up front payment

none of the above

10. Donald purchased a home for $250,000.00. He put down 25 percent of the purchase price. The mortgage was at a rate of 5.50% for 30 years. By using Table 12-1 in the textbook, what were his monthly payments?

$1,056.00,

$1,240.00,

$1,065.00,

$1,420.00

none of the above

11. Brian bought a new ranch style home for $180,000.00. Brian made a 30 percent down payment. Assuming a rate of 6.5% on a 30 year mortgage, Brian's monthly payment is:

$1,783.80,

$1,982.00,

$594.60,

$796.32,

none of the above

12. Bill took out a $125,000.00 mortgage on a lake house. The bank charged 2 points at the closing. The points amounted to:

$5,000.00,

$2,500.00,

$750.00,

$7,500.00,

none of the above

13. "One point" represents:

1 percent of the amount borrowed,

1 payment per month.

1 additional percent for every $10,000 borrowed.

1 percent per month additional charge.

none of the above

14. Chuck purchased a home in Texas for $240,000.00. He made a down payment of 20 percent and obtained a mortgage for 25 years at 6%. What amount of his first payment of $1,236.48 applied to interest?

$276.48,

$1,236.48,

$960.00,

$136.00,

none of the above

15. The difference between the monthly payments on a $95,000.00 mortgage at 5% versus 6% for 25 years is: (Use Table 12-1 in the textbook.) (Points: 2) $56.05 $65.05 $56.50 $56.60 none of the above

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