A mortgage that allows the borrower to pay less than the interest due for a few year (A) negative-amortization mortgage.. B credit-default swap. C) traditional, thirty-year fixed-rate mortgage. D "liar loan".

Which of the following statements is not true about mortgages? The ending balance of an amortized loan contract will be zero. O Mortgages are examples of amortized loans. The payment allocated toward principal in an amortized loan is the residual balance-that is, the difference between total payment and the interest due. Mortgages always have a fixed nominal interest rate.

Which of the following is true when the mortgage loan is an amortizing loan? a. At the beginning of the term of the loan the largest part of the payment is a paydown of principal, but a payments progress a rising portion is applied to interest payments. b. Interest payments and paydown of principal remain constant during the loan. c. At the beginning of the term of the loan the largest part of the payment is interest, but a payments progress a rising portion is applied to the paydown of principal. d. Paydown of principal occurs at the end of the loan. e. None of the above.

Which of the following statements is not true about mortgages? The ending balance of an amortized loan contract will be zero. Mortgages are examples of amortized loans. Mortgages always have a fixed nominal interest rate. The payment allocated toward principal in an amortized loan is the residual balance-that is, the difference between total payment and the interest due.

A Collateralized Mortgage Obligation (CMO) allows you to create some AAA rated tranches from a pool of subprime mortgages by ordering the tranches by payback precedence.   Question 36 options:   True   False

Which of the following statements is not true about mortgages? O The ending balance of an amortized loan contract will be zero. O If the payment is less than the interest due, the ending balance of the loan will decrease. Mortgages are examples of amortized loans. O Every payment made toward an amortized loan consists of two parts-interest and repayment of principal.

In a reverse mortgage there are significant monthly principal and interest payments. Question 7 options:   True   False

Summary and Comparisons of Fixed Interest Rate, Constant Payment Mortgage (CPM) Loans with Various Amortization Patterns?

Which of the following statements is true about 15-year and 30-year fixed-payment mortgages?   A. A 30-year mortgage will likely have an interest rate lower than that on a 15-year mortgage.   B. Borrowers pay more total interest over the life of a 30-year mortgage than on a 15-year mortgage assuming the same interest rate on both mortgages.   C. The remaining balance on a 30-year loan declines more quickly than on a 15-year mortgage with the same interest rate.   D. Both A and B are true.   E. Both B and C are true.   F. Both A and C are true.   G. All three (A, B and C) are true.

(Note, this is how mortgage payments are calculated.) Payments on a loan are amortized when a fixed amount is paid at the end of each time period in order to pay off both the principle of the loan and the interest accumulated up to that point. At the end of each period, interest is charged on the amount still owing. Let P be the initial amount of the loan, and i > 0 be the interest rate charged (per period), R the size of the per period payment (paid at the end of each period), and Pt the amount that is still owed after t periods. So P0 = P(a) Find P1.(b) Find a first order linear recurrence for Pt.(c) Show that the solution to your recurrence relation isPt = (P-(R/i))(1+i)^t + (R/i)