Finance
Negative amortization on a mortgage occurs when:
AThe monthly payment exceeds the interest due
BThe monthly payment is less than the interest due, causing the loan balance to increase✓ Correct
CThe borrower pays extra principal each month
DThe interest rate decreases below the initial rate
Explanation
Negative amortization occurs when a loan's minimum required payment does not cover the accruing interest. The unpaid interest is added to the loan balance, causing the balance to grow over time.
Related Oklahoma Finance Questions
- Oklahoma's Home Ownership Assistance Program helps which type of buyers?
- In Oklahoma, which type of foreclosure requires a court proceeding and typically takes longer than the alternative?
- Under TRID (TILA-RESPA Integrated Disclosure) rules, a borrower must receive the Loan Estimate within:
- A balloon mortgage common in Oklahoma seller financing arrangements requires the borrower to:
- The Community Reinvestment Act (CRA) encourages banks to:
- The initial interest rate on an ARM is often called the:
- A prepayment penalty on an Oklahoma mortgage loan is a charge imposed when:
- Oklahoma's usury laws set limits on:
Practice More Oklahoma Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oklahoma Quiz →