Valuing and Financing Property Flashcards
7 cards from real Wisconsin Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Valuing and Financing Property flashcards as text
In a fully amortized loan, each monthly payment:
Answer: Pays both principal and interest, retiring the loan by the end of the term
An amortized loan's level payments cover principal and interest so the balance reaches zero at maturity.
In the early years of an amortized mortgage, the largest portion of each payment goes toward:
Answer: Interest
Early payments are mostly interest, with principal reduction increasing over the life of the loan.
Which type of loan requires a large final payment at the end of the term?
Answer: Balloon loan
A balloon loan is not fully amortized and requires a large lump-sum payment at maturity.
The document that pledges the property as security for a loan in Wisconsin is the:
Answer: Mortgage
The mortgage is the security instrument that pledges the property, while the note is the promise to repay.
In a mortgage, the borrower is called the:
Answer: Mortgagor
The mortgagor is the borrower who gives the mortgage; the mortgagee is the lender.
A clause that allows the lender to demand full payment if the borrower defaults is the:
Answer: Acceleration clause
The acceleration clause lets the lender call the entire balance due upon default.
PMI (private mortgage insurance) is typically required when a conventional loan's down payment is:
Answer: Less than 20%
PMI is generally required on conventional loans when the borrower puts down less than 20%.