What is 'margin' in an adjustable-rate mortgage?
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 Delaware Questions
- What does the annual percentage rate (APR) on a mortgage loan represent?Finance
- What is a 'teaser rate' in a Delaware adjustable-rate mortgage?Finance
- What is a 'note rate' versus the 'annual percentage rate' (APR) on a Delaware mortgage?Finance
- What is the 'index' in an adjustable-rate mortgage (ARM)?Finance
- In Delaware, a transaction broker:Agency
- An agent's duty to the principal continues after closing regarding:Agency
- Which of the following would terminate a listing agreement in Delaware?Agency
- Express agency is created by:Agency
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 Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →