Finance
In a fully amortizing mortgage, each monthly payment consists of:
AInterest only, with principal paid at maturity
BBoth principal and interest, with the interest portion decreasing and principal portion increasing over time✓ Correct
CEqual principal payments plus declining interest
DBoth principal and interest in equal fixed amounts throughout the loan term
Explanation
In a fully amortizing loan (like a standard 30-year fixed mortgage), each payment covers both principal and interest. Early payments are mostly interest; as the balance declines, the interest portion decreases and the principal portion increases.
Related Arizona Finance Questions
- The 'annual percentage rate' (APR) on an Arizona mortgage is typically HIGHER than the note rate because:
- In an Arizona Deed of Trust, who holds bare legal title to the property?
- The secondary mortgage market in Arizona primarily functions to:
- Under RESPA, a Loan Estimate must be provided to the borrower within:
- Arizona is classified as which type of mortgage state?
- Arizona is classified as a 'lien theory' state. This means that when a borrower takes out a mortgage:
- Which type of loan would be most beneficial for an Arizona veteran purchasing a primary residence with no down payment?
- In Arizona, a lender who forecloses on a deed of trust through the trustee's sale process (non-judicial foreclosure) is generally:
Practice More Arizona Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →