Finance
In New York, 'negative amortization' on a mortgage occurs when:
AThe loan balance is paid off ahead of schedule
BThe monthly payment is insufficient to cover the interest due, causing the unpaid interest to be added to the loan balance✓ Correct
CThe interest rate decreases below zero
DThe property value declines
Explanation
Negative amortization occurs when scheduled payments do not cover all of the interest due, causing the unpaid interest to be added to the principal balance, which grows rather than declines over time.
Related New York Finance Questions
- Under New York law, a 'satisfaction of mortgage' must be filed within how many days after the mortgage is paid off?
- Which government-sponsored enterprise (GSE) purchases conventional conforming mortgages on the secondary market?
- In New York, 'mortgage assumption' allows a buyer to:
- The New York State Real Property Transfer Tax rate is:
- Interest rates on FHA loans compared to conventional loans are generally:
- The debt-to-income (DTI) ratio used by lenders measures:
- New York's transfer tax is imposed at a rate of $2 per $500 (or fraction thereof) of consideration. On a $350,000 sale, the state transfer tax would be:
- The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating in credit decisions based on:
Practice More New York Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New York Quiz →