1. (TCO 3) A borrower takes out a 30-year mortgage loan for $250,000 with an interest rate of 5%. What would the monthly payment be?

2. (TCO 3) A borrower takes out a 30-year mortgage loan for $250,000 with an interest rate of 5% and monthly payments.

3. (TCO 3) A borrower has a 30-year mortgage loan for $300,000 with an interest rate of 6% and monthly payments. If she wants to pay off the loan after 8 years, what would be the outstanding balance on the loan?

4. (TCO 3) A borrower takes out a 30-year mortgage loan for $100,000 with an interest rate of 6% plus 4 points. What is the effective annual interest rate on the loan if the loan is carried for all 30 years?

5. (TCO 3) A borrower obtains a $175,000 reverse annuity mortgage with monthly payments over 10 years. If the interest rate of the mortgage loan is 8%, what is the monthly payment received by the borrower?

6. (TCO 3) Risk is an important component of interest rates. Which of the following risks is NOT a determinant of interest rates?

7. (TCO 3) One of the most popular amortizing mortgages today is the constant payment mortgage. Which of the following characterizes the components of the CPM payment over the life of the loan?

8. (TCO 3) Over the life of the loan, which of the following loans would continually have a lower principal balance given each loan had the same term, principal amount, and average interest rate?

9. (TCO 3) APR stands for which of the following?

10. (TCO 4) If an ARM index increased 15%, the negative amortization on a loan with a 5% annual payment cap is calculated by

11. (TCO 4) Which of the following clauses leads to higher risk for an ARMs lender?

12. (TCO 4)

13. (TCO 4) Under which scenario is negative amortization likely to occur?

14. (TCO 4) When a lender sets a maximum reduction in payments or interest rates on reset dates, these are called ________.

15. (TCO 4) Examples of indexes that can be used to reset the interest rate on an ARM include all but ________