In Colorado, a 'reverse mortgage' allows older homeowners to:
Why B. Convert a portion of their home equity into cash or income without making monthly mortgage payments, with the loan repaid when the home is sold or the borrower leaves Is Correct
Answer B: B. Convert a portion of their home equity into cash or income without making monthly mortgage payments, with the loan repaid when the home is sold or the borrower leaves
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.
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Key Terms to Know
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
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.
Math Concepts
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