Which type of mortgage adjusts the interest rate periodically based on a specified index?
Why Adjustable-rate mortgage (ARM) Is Correct
Answer B: Adjustable-rate mortgage (ARM)
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.
Key Finance Terms in This Question
People Also Study
Related North Carolina Questions
- A NC adjustable-rate mortgage has an initial 'teaser rate' period. After the fixed period ends, the rate adjusts based on:Finance
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the down payment is less than:Finance
- Which type of mortgage allows the borrower to pay only interest during the loan term, with the full principal due at maturity?Finance
- An adjustable-rate mortgage (ARM) in North Carolina typically has an initial rate that is: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 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 buyer secures a 30-year fixed mortgage on a $350,000 NC home with 10% down at 7% annual interest. The loan amount is:Real Estate Math
- A buyer in NC borrows $280,000 at 6% annual interest on a 30-year fixed-rate mortgage. The first month's interest payment is:Real Estate Math
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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 →