Finance
A Mississippi homebuyer is comparing a 15-year mortgage at 5.5% versus a 30-year mortgage at 6.25% for a $200,000 loan. The advantage of the 15-year mortgage is:
ALower monthly payment
BSubstantially less total interest paid over the life of the loan and faster equity buildup✓ Correct
CLower down payment required
DEasier qualification standards
Explanation
The 15-year mortgage has higher monthly payments but results in dramatically less total interest paid (roughly half or less) and builds equity much faster than a 30-year loan. The shorter amortization period means less time for interest to accumulate.
Related Mississippi Finance Questions
- Which of the following is an advantage of a fixed-rate mortgage for a Mississippi homebuyer?
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- An 'assumption' of a Mississippi mortgage requires:
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- A Mississippi lender uses 'automated underwriting systems' (AUS) like Desktop Underwriter (DU) or Loan Product Advisor (LP). These systems:
- A Mississippi seller carries back a second mortgage to help a buyer finance the purchase. Which of the following is TRUE about this arrangement?
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