Question

Match the terms to their correct meaning

1. APR
interest rate that does not change
2. Interest
charge for borrowing money
3. Closing costs
Loan To Value
a loan based on the value of the
4. Down payment
real estate it is used to purchase
fees required if loan is paid off
before the end of its original term
5. Fixed rate
6. LTV
initial cash payment
7. Mortgage
8. Prepayment penalties
interest rate tied to an index that
may change
fees associated with taking out a
mortgage
annual percentage rate
9. Variable rate

Answer 1

balloon payment: large payment due at the end of the loan period

closing costs: fees associated with taking out a mortgage

down payment: initial cash payment

fixed rate: interest rate that does not change

LTV: Loan To Value

mortgage: a loan based on the value of the real estate it is used to purchase

prepayment penalties: fees required if loan is paid off before the end of its original term

variable rate: interest rate tied to an index that may change