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1.
Because fixed-rate mortgage payments are amortized, the percentage of each payment that is applied to interest _______.
Decreases with time. With an amortization schedule, the portion of each monthly payment applied to interest decreases as your equity grows.
2.
Mortgage lenders may require that you purchase which of the following forms of insurance?
Hazard and title insurance. Lenders may require that you purchase hazard and title insurance, but may not require you to buy life insurance.
3.
The current market value of your home, minus what you owe on it, is commonly known as your _________.
Home equity. Your home equity is the difference between what you own (the current market value of your property) and what you owe on the property.
4.
Building in a peaceful, secluded area away from other development is a good way to enhance the value of your home.
False. While seclusion may sound idyllic, the best way to increase your home's value is to build where lots of other people want to live–near cities and other sources of economic development.
5.
All of the following items may receive favorable tax treatment, except _______.
Mortgage principal payments. While you may be able to deduct property taxes and the part of your mortgage payment that goes to interest on the loan, the principal portion of the monthly payment is not deductible.