Finance
A bi-weekly mortgage payment plan in Pennsylvania results in the borrower making the equivalent of how many extra monthly payments per year?
ANone
BOne✓ Correct
CTwo
DThree
Explanation
Bi-weekly payments mean 26 payments per year (52 weeks ÷ 2). Since 24 payments equal 12 months of regular payments, the extra 2 bi-weekly payments equal one additional monthly payment per year.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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