Which type of mortgage index is commonly used for ARM loans?
Why SOFR (Secured Overnight Financing Rate) and Treasury indexes Is Correct
Answer B: SOFR (Secured Overnight Financing Rate) and Treasury indexes
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
- An Arizona borrower obtains a loan where the interest rate can change periodically based on an index. This is called a: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
- In Arizona, which type of deed is most commonly used by sheriffs or trustees in foreclosure sales?Property Ownership
- 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
- Which type of loan would be most beneficial for an Arizona veteran purchasing a primary residence with no down payment?Finance
- Arizona is classified as which type of mortgage state?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.
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.
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.
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 →