The 'margin' on an adjustable-rate mortgage in Arizona is:
Why A fixed percentage added to the index to determine the fully-indexed interest rate Is Correct
Answer B: A fixed percentage added to the index to determine the fully-indexed 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.
People Also Study
Related Arizona Questions
- 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
- The 'annual percentage rate' (APR) on an Arizona mortgage is typically HIGHER than the note rate because:Finance
- An Arizona adjustable-rate mortgage (ARM) with a '5/1' structure means:Finance
- An Arizona property produces a Net Operating Income (NOI) of $120,000 per year. Using a capitalization rate of 6%, what is the estimated value?Property Valuation
- An appraiser values an Arizona commercial property using a cap rate of 7% and an NOI of $63,000. What is the indicated value?Property Valuation
- An Arizona property has a market value of $475,000. It is assessed at 10% of market value, and the tax rate is $9.20 per $100 of assessed value. What is the annual property tax?Real Estate Math
- An Arizona salesperson operating without a current, valid license is subject to:Arizona License Law
- An Arizona borrower obtains a loan where the interest rate can change periodically based on an index. This is called a:Finance
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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 →