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CHAPTER III
Loan choices aplenty
  1. Joe and Jill each buy a house, and each take out a $100,000 loan. Joe takes out a conventional 30-year fixed rate mortgage, Jane opts for a conventional 15-year mortgage. Which of the following correctly summarizes how Joe's mortgage is different than Jane's?

    a) Joe's 30-year mortgage has a higher interest rate, lower monthly payments and higher overall interest payments. It builds equity more slowly than Jane's mortgage.
    b) Jane's 15-year mortgage has a higher interest rate, higher monthly payments and higher overall interest payments. It builds equity more slowly than Joe's mortgage.
    c) Joe's 30-year mortgage has a lower interest rate, lower monthly payments and lower overall interest payments. It builds equity more quickly than Jane's mortgage.
  2. Which of the following correctly describes the benefits of a 30-year fixed rate mortgage?

    a) Borrowers can purchase a larger home by establishing smaller monthly payments over a longer term.
    b) Borrowers can take advantage of lower monthly payments to invest at higher yields than home.
    c) A higher interest bill increases the borrower’s tax deduction, potentially reducing or eliminating their federal income tax liability.
    d) All of the above.
  3. True or false: The interest rates of adjustable-rate mortgages (ARMs) move up or down as market rates fluctuate.

    a) True
    b) False
  4. True or False: Adjustable-rate mortgages (ARMs) are favorable when rates are going up and your salary is going down.

    a) True
    b) False

TABLE OF CONTENTS

CHAPTER I
  Lesson 1
  Quiz

CHAPTER II
  Lesson 2
  Quiz

CHAPTER III
  Lesson 3
  Lesson 4
  Lesson 5
  Quiz

CHAPTER IV
  Lesson 6
  Lesson 7
  Quiz

CHAPTER V
  Lesson 8
  Lesson 9
  Quiz

CHAPTER VI
  Lesson 10
  Lesson 11
  Quiz

CHAPTER VII
  Lesson 12
  Lesson 13
  Lesson 14
  Quiz

CHAPTER VIII
  Lesson 15
  Lesson 16
  Lesson 17
  Lesson 18
  Quiz

CHAPTER IX
  Lesson 19
  Quiz

CHAPTER X
  Lesson 20
  Quiz

CHAPTER XI
  Lesson 21
  Quiz

CHAPTER XII
  Lesson 22
  Lesson 23
  Lesson 24
  Quiz

CHAPTER XIII
  Lesson 25
  Lesson 26
  Lesson 27
  Quiz

CHAPTER XIV
  Lesson 28
  Lesson 29
  Lesson 30
  Quiz

Definitions

 
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