14 Questions
Which type of loan is recommended for purchasing a home with less than a 20% down payment?
Adjustable Rate Mortgage (ARM)
What is the most common mortgage term chosen by the majority of Americans?
30 years
How often can the interest on a 5/1 ARM be adjusted after the initial 5 year period?
Every year
Which type of mortgage loan offers 100% financing for the purchase of a home?
VA Loans
What is the primary advantage of the FHA loan program?
Low down payment requirement
What is the purpose of an escrow account in a mortgage payment?
To ensure payment of homeowner's insurance and taxes
What was a common feature in subprime mortgage lending between 2001 and 2006?
Balloon mortgages
Which type of mortgage loan is recommended for purchasing a home with a 10% cash down payment?
Adjustable Rate Mortgage (ARM)
What is the interest rate difference between a 15-year fixed mortgage and a 30-year fixed mortgage?
0.75%
When does an Adjustable Rate Mortgage (ARM) allow the interest rate to be adjusted after the initial 5-year period?
Every 1 year
Which type of mortgage loan was most common before the Great Depression?
Balloon mortgage
What happens at the end of a balloon mortgage term?
The borrowers pay off the loan in full
Which government-insured home loan program allows borrowers to make a down payment as low as 3.5%?
FHA loan
What is the primary advantage of the VA loan program?
Borrowers can receive 100% financing
Test your knowledge on down payments and home loan details with this quiz. Learn about the recommended 20% down payment, PMI (private mortgage insurance), and splitting loans. Understand how PMI terminates and gain insight into the importance of home loan details.
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