Finance
A Wisconsin homeowner who refinances their mortgage at a lower rate to reduce monthly payments is engaging in:
AA cash-out refinance
BA rate-and-term refinance✓ Correct
CA reverse mortgage
DA wraparound mortgage
Explanation
A rate-and-term refinance replaces an existing mortgage with a new one at a different (usually lower) rate or term, without taking out additional cash.
People Also Study
Related Wisconsin Questions
- A Wisconsin homeowner refinances their mortgage to obtain a lower interest rate. The primary benefit is:Finance
- A Wisconsin borrower has a monthly gross income of $6,000. Their new mortgage PITI will be $1,500. What is the housing (front-end) DTI ratio?Finance
- A Wisconsin homeowner's equity in their $350,000 home is $105,000. What is the LTV of their mortgage?Real Estate Math
- A Wisconsin homeowner's insurance premium is $1,800/year. If the lender impounds this cost monthly, how much is added to the monthly mortgage payment?Real Estate Math
- A Wisconsin borrower has a $280,000 mortgage at 6% annual interest. What is the interest portion of the first monthly payment?Finance
- On a Wisconsin mortgage loan, the annual percentage rate (APR) differs from the stated interest rate because the APR:Finance
- A Wisconsin property sold for $185,000. The buyer paid $5,000 in earnest money and obtained an 80% LTV mortgage. How much cash does the buyer need at closing (excluding closing costs)?Real Estate Math
- A Wisconsin buyer obtains a $200,000 mortgage at 5.5% for 30 years. If the monthly payment is $1,136, what is the principal portion of the first payment?Real Estate Math
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.
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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Study This Topic
Practice More Wisconsin Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Wisconsin Quiz →