Discount points paid on an Arizona mortgage loan:
Why Are prepaid interest that lower the loan's interest rate Is Correct
Answer B: Are prepaid interest that lower the loan's interest rate
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related Arizona Questions
- A buyer in Arizona purchases a home for $420,000 with a 20% down payment. What is the amount of the buyer's mortgage loan?Real Estate Math
- Discount points paid by a buyer at closing on an Arizona home loan have the effect of:Finance
- A 30-year mortgage has monthly payments of $1,610. The loan balance is $280,000. How much is the interest portion of the first payment at a 6% annual interest rate?Real Estate Math
- A buyer obtains an $180,000 loan at 6% interest for 30 years. If the monthly payment factor is $5.996 per $1,000, what is the total amount paid over the life of the loan?Real Estate Math
- A buyer wants a 30-year mortgage at 7% interest. Monthly payment factor is $6.653 per $1,000. If their maximum monthly payment is $2,200, what is the maximum loan amount?Real Estate Math
- An Arizona homebuyer obtains a $280,000 mortgage at 7% annual interest. What is the first month's interest payment?Finance
- A homebuyer in Arizona pays 2 discount points on a $240,000 loan. How much do the points cost?Finance
- A buyer in Arizona obtains a $320,000 adjustable-rate mortgage (ARM) with an initial rate of 5.5%. The loan has a 2/2/5 cap structure. The MAXIMUM rate after the first adjustment is:Finance
Key Terms to Know
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →