Question

Q Searc Ch 05: Assignment - Making Automobile and Housing Decisions Term Answer Description Fixed-rate mortgage A. This mortgage allows borrowers to make smaller-but gradually and constantly increasing-payments for the first three to five years. At the end of this period, the payments then stabilize at the higher level and are repaid over the remaining life of the loan. Interest-only mortgage B. Over the life of this mortgage, the interest rate and the monthly payment are fixed. VA loan guarantee C. The lender in this type of mortgage assumes all of the risk of loss, including that caused by borrower default. Blweekly mortgage D. This mortgage provides for two interest rates: one that is charged for the first five to seven years and a higher rate that is charged during the remaining term of the loan. Two-step ARM E. This mortgage is characterized by an interest rate and monthly payments that can be adjusted over the life of the loan baled on movements in market interest rates. Adjustable-rate F. This mortgage allows the borrower to pay only the accrued interest on the loan for a mortgage specified period of time; after this date, all payments require the payment of both Interest and principal. Convertible ARM G. This mortgage allows a borrower to convert from an adjustable-rate loan to a fixed-rate loan during a prespecified time period. H. This loan program, offered through a department of the federal government, provides Graduated-payment ARM mortgage insurance to lenders offering mortgage loans with loan-to-value ratios greater than 80%. I. The payments on this mortgage are equal to one-half of a regular monthly payment and FHA mortgage insurance are paid every two weeks rather than once a month. J. This loan guarantee is offered by a department of the federal government to lenders Conventional mortgage who make qualifled loans to eligible veterans of the U.S. Armed Forces and their surviving spouses.

Answer 1

Term	Answer
Fixed rate mortgage	B
Interest only mortgage	F
VA loan Mortgage	J
Biweekly Mortgage	I
Two-step ARM	D
Adjustable-rate mortgage	E
Convertible ARM	G
Graduated-payment ARM	A
FHA Mortgage insurance	H
Conventional Mortgage	C