Finance
What is 'recasting' of a mortgage loan in Rhode Island?
ARefinancing a mortgage with a new lender
BThe process of recalculating a mortgage's remaining payments after a large principal payment, maintaining the same interest rate and term but reducing monthly payments✓ Correct
CConverting an ARM to a fixed-rate mortgage
DAdding a co-borrower to an existing mortgage
Explanation
Mortgage recasting allows a borrower who makes a large principal payment to have the remaining payments recalculated at the same rate and remaining term, reducing the monthly payment while keeping the loan in place.
People Also Study
Related Rhode Island Questions
- A mortgage that requires equal monthly payments that fully pay off both principal and interest over the loan term is called a(n):Finance
- A Rhode Island buyer takes out an FHA loan. What is the minimum down payment required for an FHA-insured mortgage with a credit score of 580 or above?Finance
- A buyer obtains a 30-year fixed mortgage at 7% on a $280,000 loan. The monthly payment factor per $1,000 at 7% for 30 years is $6.65. What is the approximate monthly principal and interest payment?Real Estate Math
- A Rhode Island buyer makes a 20% down payment on a $425,000 home. How much is the mortgage loan amount?Real Estate Math
- What does 'PITI' stand for in a Rhode Island monthly mortgage payment?Finance
- A Rhode Island buyer gets a $300,000 mortgage at 6.5% for 30 years. If the monthly payment factor is $6.32 per $1,000, what is the monthly P&I payment?Real Estate Math
- A Rhode Island buyer qualifies for a maximum monthly PITI payment of $2,500. If taxes and insurance total $600/month, what is the maximum monthly principal and interest (P&I) payment?Real Estate Math
- A Rhode Island borrower's PITI payment is $2,400/month. The lender requires that PITI not exceed 28% of gross monthly income. What minimum monthly income is required?Finance
Key Terms to Know
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.
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.
Math Concepts
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →