1. In mortgage lending, what do the letters "PITI" stand for?
2. What is the name of the type of loan whereby the monthly payments include both principal and interest and the loan balance goes down each month as a result of payments made?
3. Using the mortgage payment calculator from the website listed in the reading assignment above, calculate the following two monthly payments (principal + interest): information: o Loan #1: Loan Amount = $150,000 Interest Rate = 7.5% Term of Loan = 30 years. What is the monthly payment? o Loan #2: Loan Amount = $150,000 Interest Rate = 7.5% Term of Loan = 15 years. What is the monthly payment?
4. Give two other names for an "interest only loan."
5. If you have a mortgage loan on your home, what is the term used to describe the amount you "owe?"
6. If you have a mortgage loan on your home, what is the term used to describe the cost of the money you are borrowing?
7. What are advantages (from the borrower's perspective) of an adjustable-rate mortgage compared to a fixed-rate mortgage?
8. What are disadvantages (from the borrower's perspective) of an adjustable-rate mortgage compared to a fixed-rate mortgage?
9. Using the mortgage calculator in the reading assignment (above) what would your monthly payment be if you borrowed $120,000 at 7.75% interest for 30 years?