Finance
What is 'amortization' in the context of a Florida mortgage?
AThe process of deprecating real property over time
BThe gradual reduction of a loan balance through regular payments of principal and interest✓ Correct
CThe calculation of the loan's annual percentage rate
DThe process of converting an ARM to a fixed-rate mortgage
Explanation
Amortization is the systematic reduction of a loan balance over time through regular scheduled payments that include both principal and interest. Early payments are mostly interest; later payments are mostly principal. A fully amortized loan is paid off at the end of the term.
Related Florida Finance Questions
- A Florida buyer obtains a mortgage with a 'due-on-sale' clause. This clause means:
- A Florida borrower's credit score falls into the 'subprime' category. This typically means the borrower will receive:
- A Florida seller agrees to carry back a second mortgage for a buyer. The seller should obtain which documents to secure this agreement?
- A Florida borrower applies for a 'bridge loan.' This type of financing is:
- A Florida buyer obtains a mortgage with a 'prepayment penalty' clause. This clause means:
- A Florida borrower is applying for a 'jumbo' mortgage. This means the loan amount:
- A Florida buyer applies for a conventional mortgage. The lender requests a 'tri-merge' credit report. This means:
- Florida real estate transactions commonly use 'HUD-1 proration' for property taxes because Florida taxes are paid in arrears. If the annual property tax is $4,380 and closing is August 15, how much does the seller owe the buyer as a property tax proration credit?
Practice More Florida Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Florida Quiz →