An 'interest-only loan' in NC means the borrower's monthly payment:
Why Covers only the interest portion with no reduction in principal Is Correct
Answer B: Covers only the interest portion with no reduction in principal
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related North Carolina Questions
- Which type of mortgage allows the borrower to pay only interest during the loan term, with the full principal due at maturity?Finance
- A loan has a monthly payment of $1,750 and the current balance is $230,000 at 7.5% annual interest. How much of the first payment is interest?Real Estate Math
- A buyer's loan balance is $180,000 at 7% annual interest. What is the first month's interest payment?Real Estate Math
- A buyer needs to borrow $320,000 at 6.5% for 30 years. Using a factor of $6.32 per $1,000, what is the monthly principal and interest payment?Real Estate Math
- A borrower in North Carolina has a gross monthly income of $5,500 and monthly debts of $800. What is the maximum monthly housing payment allowed under a 28% front-end DTI ratio?Finance
- An interest-only loan in North Carolina requires the borrower to:Finance
- A borrower in NC has a monthly PITI payment of $1,800 and a gross monthly income of $6,000. Their housing expense ratio is:Real Estate Math
- An 'amortized loan' in NC means the loan is repaid through:Finance
Key Terms to Know
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →