Which type of mortgage allows the borrower to pay only interest for a specified period, with principal payments beginning later?
Why Interest-only mortgage Is Correct
Answer B: Interest-only mortgage
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 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
- An Arizona buyer takes out a $350,000 mortgage at 6.75% for 30 years. The monthly payment factor is $6.49 per $1,000. What is the total interest paid over the life of the loan?Real Estate Math
- 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
- An Arizona borrower obtains a loan where the interest rate can change periodically based on an index. This is called a:Finance
- A buyer's loan has a principal balance of $320,000 at 6% annual interest. What is the first month's interest portion of the payment?Real Estate Math
- A loan amortizes over 30 years. The monthly payment factor is $5.99 per $1,000 borrowed. The loan amount is $280,000. What is the monthly payment?Real Estate Math
- In Arizona, a 'partial release clause' in a blanket mortgage allows the borrower to:Escrow & Title
- A '2-1 buydown' mortgage in Arizona temporarily reduces the borrower's interest rate by:Finance
Key Terms to Know
The 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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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 →