Mortgage Loan Question and Answers
What mortgage term offers customers the highest monthly payment and the lowest overall interest cost?
Explanation:
The monthly mortgage payment increases as the mortgage term shortens, while the interest rate and overall interest costs decrease.
What is the minimal credit score that most lenders demand in order to offer you their best mortgage interest rate?
Explanation:
Although it is undoubtedly possible for borrowers with lower credit scores to qualify for a mortgage, lenders often ask that customers have a minimum credit score of 680 in order to acquire the best interest rate.
What mortgage program guarantees that your interest rate and monthly mortgage payment won't change?
Explanation:
A fixed rate mortgage has a fixed monthly payment and interest rate for the duration of the loan, making it the least risky type of mortgage.
True or False: In order to acquire a property, you must have a down payment of at least 20% of the total cost.
Explanation:
You could put down as little as 3.5 percent of the total cost (or even nothing in some circumstances!). There are many FHA and specific Community Lending Programs available, however, you will need to pay for private mortgage insurance.
How much of your gross monthly income should you set aside for your mortgage and other debt obligations?
Explanation:
Mortgage, property tax, and other debt payments frequently account for up to 45 percent of borrowers' monthly gross income.
Which of these expenses is included in the overall monthly cost of housing?
Explanation:
Your mortgage payment PLUS property taxes, insurance, plus any other potentially applicable expenses like HOA fees, PMI, or FHA MIP make up your total monthly housing expense.
What paperwork must a lender deliver in order for a consumer to compare several mortgage offers?
Explanation:
Within three days of receiving a loan application, lenders are required to issue a Loan Estimate that details important mortgage parameters, such as interest rate and expenses.