Finance
Negative amortization on a NH mortgage means:
AThe loan balance decreases faster than the amortization schedule
BThe loan balance increases because payments are less than the accruing interest✓ Correct
CThe borrower has a negative credit score
DThe property value has decreased below the loan balance
Explanation
Negative amortization occurs when the required payment does not cover the full interest due, causing the unpaid interest to be added to the principal balance — which grows over time despite payments being made.
Related New Hampshire Finance Questions
- The Home Mortgage Disclosure Act (HMDA) requires lenders to:
- USDA Rural Development loans may be available to New Hampshire buyers purchasing in:
- The Federal Reserve's open market operations affect NH mortgage rates primarily by:
- A NH buyer's lender issues a 'commitment letter' after underwriting. This letter:
- A NH first-time homebuyer using the NH Housing Finance Authority's Home Flex program benefits from:
- A NH bank appraises a property at $290,000. The buyer offered $305,000. If the lender will loan 80% of the lower of appraised value or purchase price, what is the maximum loan amount?
- A NH homeowner with a $280,000 balance on their mortgage wants to take out a $40,000 home equity line of credit (HELOC). The home is worth $380,000. What is the combined LTV after the HELOC?
- The 'three-day right of rescission' under TILA applies to which NH transaction?
Practice More New Hampshire Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Hampshire Quiz →