Podcast
Questions and Answers
Which one of these is a common type of mortgage?
Which one of these is a common type of mortgage?
- Fixed rate mortgage (correct)
- Interest-only mortgage
- Reverse mortgage
- Variable rate mortgage
What is the purpose of a reverse mortgage?
What is the purpose of a reverse mortgage?
- To buy a home
- To convert home equity into cash (correct)
- To pay off credit card debt
- To refinance a mortgage
What is a disadvantage of an interest-only mortgage?
What is a disadvantage of an interest-only mortgage?
- Lower monthly payments
- Flexibility in payment schedule
- Ability to build home equity
- Higher total interest paid (correct)
Flashcards
Fixed-rate mortgage
Fixed-rate mortgage
A mortgage where the interest rate remains the same throughout the loan term.
Reverse mortgage
Reverse mortgage
A loan type that allows homeowners aged 62+ to convert part of their home equity into cash without selling their home.
Disadvantage of interest-only mortgage
Disadvantage of interest-only mortgage
Although initial payments are lower, the total interest paid over the life of the loan is significantly higher because the principal is not being paid down.
