Mortgage Terms Question and Answers

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Which option most accurately describes CLOSING COSTS?

Correct! Wrong!

Explanation:
Closing costs are expenses related to buying a home that is paid at the conclusion of a real estate deal. When the sale is finalized, the buyer receives the property's title from the seller. Either the buyer or the seller is responsible for paying the closing costs.

What option best describes appraisal?

Correct! Wrong!

Explanation:
An appraisal is the estimation of a qualified person on the value of a piece of property, such as real estate, a company, a collectible, or an antique. The designation of the approved appraiser must come from the regulatory agency overseeing the appraiser's area of practice. Appraisals are frequently used to estimate a potential selling price for a product or piece of property as well as for insurance and tax purposes.

Which option most accurately describes CONSUMER REPORTING AGENCY?

Correct! Wrong!

Explanation:
Any individual who regularly engages in the practice of compiling or evaluating consumer credit information or other information on consumers for the purpose of providing consumer reports to third parties for monetary fees, dues, or on a cooperative nonprofit basis, and who uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports, is referred to as a "consumer reporting agency" (CRA).

What option most accurately describes annual percentage rate (APR)?

Correct! Wrong!

Explanation:
APR, or annual percentage rate, refers to the cost of borrowing money from a bank or other lender. The percentage shows how much the loan will cost you each year. Every time you apply for a credit card, mortgage, auto loan, student loan, or any other sort of loan, the phrase APR will appear.

Which option most accurately describes an adjustable rate mortgage (ARM)?

Correct! Wrong!

Explanation:
A home loan with a variable interest rate is known as an adjustable-rate mortgage (ARM). The starting interest rate on an ARM is set for a specific amount of time. Following then, the interest rate charged on the unpaid balance resets sporadically, sometimes on a monthly basis.

Which option most accurately describes CLOSING FEE?

Correct! Wrong!

Explanation:
For handling the closing, this is paid to the title firm, escrow business, or lawyer. In your property purchase, the title firm or escrow independently supervises the closing. Some states demand the presence of a real estate lawyer at each closing.

CREDIT GRADE is best described by which option?

Correct! Wrong!

Explanation:
A high credit score, which tells lenders how hazardous of a borrower you are, is referred to as having an A credit grade. Less risk is indicated by a higher number, which may also result in more favourable arrangements for borrowing rates and down payments.

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