Finance
In New Mexico, a 'biweekly mortgage' payment plan helps borrowers pay off their loan faster because:
AThe interest rate is lower
BBiweekly payments (26 half-payments per year) equal 13 full monthly payments per year instead of 12, reducing principal faster and saving significant interest✓ Correct
CThe loan amount is reduced at origination
DThe bank charges lower fees for biweekly plans
Explanation
Biweekly payments create an extra full payment each year (26 x 50% = 13 monthly payments vs. 12).
People Also Study
Related New Mexico Questions
- A mortgage has a monthly payment of $1,450, including $950 interest and $500 principal. What is the outstanding loan balance if the next month's interest is $945.25?Real Estate Math
- What is the monthly principal and interest payment on a $180,000 mortgage at 7.5% over 30 years? (Use factor of $6.99 per $1,000 borrowed)Real Estate Math
- Which mortgage type in New Mexico has payments that remain constant throughout the life of the loan, with the same amount applied to principal and interest each month?Finance
- In New Mexico, which type of mortgage allows the borrower to make only interest payments for a set period, after which payments increase to pay principal?Finance
- A New Mexico buyer is prequalified to spend up to 38% of gross monthly income on total housing debt. If their gross monthly income is $8,500, what is their maximum total monthly housing payment (PITI + debts)?Real Estate Math
- A New Mexico home is purchased for $280,000. The buyer pays 20% down and obtains a 30-year fixed loan at 7%. After the first payment (monthly factor $6.65/$1,000), what is the principal balance remaining?Real Estate Math
- A mortgage that requires a large final payment at the end of the loan term is called a:Finance
- In New Mexico, which instrument releases a deed of trust lien after the mortgage is paid in full?Escrow & Title
Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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.
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.
Math Concepts
Study This Topic
Practice More New Mexico Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Mexico Quiz →