Mortgage Basics | FinTrex

Question 1 of 10

What is a repayment mortgage designed to do?

Pay interest and reduce principal over the term if payments are made as scheduledPay interest only foreverGuarantee house-price growthRemove property taxes

Question 2 of 10

What usually happens to the monthly payment if the interest rate rises and other loan terms stay the same?

It generally risesIt must fallIt becomes zeroIt is unaffected

Question 3 of 10

Why stress-test affordability at a higher rate?

To see whether the household could absorb a future payment increaseTo predict the exact future rateTo guarantee refinancingTo raise the property value

Question 4 of 10

What does a larger deposit generally do to the loan amount?

Reduces the amount that needs to be borrowedAlways increases the rateEliminates all feesGuarantees approval

Question 5 of 10

Why should purchase costs be planned separately from the deposit?

Legal, tax, valuation, moving and setup costs may also require cashThey are included in every deposit automaticallyThey never existThey are paid by the stock market

Question 6 of 10

What can extending a mortgage term do?

Lower the scheduled payment but increase the time interest may accrueGuarantee a lower total costRemove principalFix the rate forever

Question 7 of 10

What is an early repayment charge?

A possible fee under some mortgage terms for repaying or switching earlyA guaranteed taxA house-price indexA credit score

Question 8 of 10

Why compare more than the headline mortgage rate?

Fees, product terms, insurance and total cost also matterThe rate never mattersOnly the logo mattersMonthly payment is always identical

Question 9 of 10

What is loan-to-value (LTV)?

Loan amount relative to the property's value or purchase price under the lender's methodMonthly income divided by taxInterest divided by termDeposit divided by salary

Question 10 of 10

Does a calculator result equal a lender approval?

No, lenders apply their own affordability, credit and policy criteriaYes, automaticallyOnly when the payment is smallOnly for fixed rates