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John Mark, Accountant
Category: Finance
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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
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
Submitted: 6 years ago.
Category: Finance
Expert:  John Mark replied 6 years ago.

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

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