We know that the mere mention of the word 'mortgage' might induce a cold sweat -- or make you want to take a nice, long nap instead of taking this quiz. But before you dismiss the topic as too boring or complicated, remember that lack of education is the reason that so many people are caught up in this mortgage mess. So doesn't it make sense to educate yourself? And this easy little quiz is just the way to get your feet wet.
What are the components of your monthly mortgage payment?
- principal, interest, escrow
- principal, interest, taxes, insurance
- principal, interest, taxes, amortization fees
What's one of the main problems with subprime mortgages?
- Their introductory interest rates are very low but increase greatly after a few years.
- They don't require a down payment.
- The term is so short that the monthly payments are sky-high.
- The interest rates fluctuate wildly every month.
A credit score below this number makes you a subprime borrower.
What state has the country's highest rate of subprime mortgages?
What's the largest mortgage company in the country?
- Bank of America
- Wells Fargo
- ING Direct
If you make one extra payment a year on a 30-year fixed mortgage, by how much will it shorten the term of your loan?
- one year
- two years
- five years
- 10 years
How many different terms (lengths) are available for a fixed-rate mortgage?
What's the easiest term to qualify for: 15, 20 or 30 years?
What does ARM stand for?
- adjustable-return mortgage
- annual return mortgage
- adjustable-rate mortgage
- annual reasonable mortgage
If you get an ARM, your interest rate might increase up to __ percent.
In a 2007 report, what did Countrywide find was the No. 1 reason for foreclosure?
- loss of income
- changes in mortgage interest rate
- failure to sell the home
In 2008, the Federal Housing Administration reported that 900,000 homes were in foreclosure. How much of an increase was that from 2007?
- 8 percent
- 23 percent
- 47 percent
- 58 percent
- 71 percent
The conventional loan limit for federally backed (Fannie May and Freddie Mac) mortgages is $300,700. What are loans called that are over that limit?
- monster loans
- jumbo loans
- colossal loans
- oversize loans
- mammoth loans
What's the debt-to-income ratio that most lenders require?
OK, so what does that mean? What does the 28 mean?
- No more than 28 percent of your total monthly pretax income can be used for housing.
- You must pay less than 28 percent of your monthly post-tax income for all debts, including housing.
- Your monthly income must be 28 percent greater than the total of your debts.
And what does the second number -- the 36 -- mean?
- Your monthly income has to be 36 percent more than the mortgage payment.
- No more than 36 percent of your monthly income can go toward your total monthly debt, including the mortgage.
When lenders are looking at your job history, they'd like you to have been at your current job for at least ____ years.
What percentage of your total loan will you probably have to pay in closing costs?
- 1 to 2
- 2 to 5
- 3 to 6
- 4 to 7
When did mortgages, as they now work, come into being?
What does it mean to be 'upside-down' on your mortgage?
- You owe more than your house is worth.
- You've failed to make payments for six months.