A balloon payment mortgage makes the best sense for borrowers who are?

Balloon payments allow borrowers to reduce that fixed payment amount in exchange for making a larger payment at the end of the loan’s term. In general, these loans are good for borrowers who have excellent credit and a substantial income.

What best explains the relationship between a borrower’s credit score and a down payment requirement ??

What best explains the relationship between a borrower’s credit score and a down payment requirement? Someone with a high credit score may be required to make a lower down payment. over time, usually many years.

What is a balloon payment mortgage When is this type of mortgage useful quizlet?

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A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity. The final payment is called a balloon payment because of its large size. Balloon payment mortgages are more common in commercial real estate than in residential real estate.

What is the best reason for homebuyers to create a budget before taking out a mortgage quizlet?

What is the best reason for homebuyers to create a budget before taking out a mortgage? The chart shows the costs associated with the purchase of a new home. There are additional fees and costs involved in taking out a mortgage. The graph shows changes in interest rates since 1975.

What impact might and economic downturn have on a borrowers fixed-rate mortgage?

What impact might an economic downturn have on a borrower’s fixed-rate mortgage? It has no impact because a fixed-rate mortgage cannot change.

How much is a downpayment on a 200k house?

If you’re buying a home for $200,000, in this case, you’ll need $10,000 to secure a home loan. FHA Mortgage. For a government-backed mortgage like an FHA mortgage, the minimum down payment is 3.5%. For a home that costs $200,000, you’ll need to save $7,000 to get a home mortgage loan.

Who qualifies for an FHA loan?

  1. Have a FICO score of 500 to 579 with 10 percent down, or a FICO score of 580 or higher with 3.5 percent down.
  2. Have verifiable employment history for the last two years.

What type of loan usually involves a balloon payment quizlet?

In an interest-only loan, periodic payments over the loan term apply only to interest owed, not to principal. At the end of the term, the full balance must be paid off in a lump-sum, “balloon” payment.

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Which of these types of loans usually involves a balloon payment?

A balloon mortgage is a type of real estate loan (more often commercial than residential) that offers a lower fixed monthly payment until the end of the loan when a larger lump sum payment (a balloon) is required. It is typically available to borrowers with excellent credit and income.

When loans are amortized monthly payments are?

An amortizing loan is a type of debt that requires regular monthly payments. Each month, a portion of the payment goes toward the loan’s principal and part of it goes toward interest. Also known as an installment loan, fully amortized loans have equal monthly payments.

For which buyer would a lender most likely approve a $200000 mortgage?

a person with a credit score of 800 with a large amount of debt who has recently switched to a lower-paying job. a person with a credit score of 760 with a small amount of debt who has had steady employment for many years.

Which formula should be used to correctly calculate the monthly mortgage payment?

Use the formula P= L[c (1 + c)n] / [(1+c)n – 1] to calculate your monthly fixed-rate mortgage payments. In this formula, “P” equals the monthly mortgage payment.

What type of mortgage adjusts the interest rate?

An adjustable-rate mortgage (ARM) is a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. With an adjustable-rate mortgage, the initial interest rate is fixed for a period of time.

Which type of loan most often involves long term repayment over 30 years?

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Which type of loan most often involves long-term repayment over 30 years quizlet? Amortized loans are usually fixed-interest, long-term loans of 15 to 30 years. At the end of the loan term, the full amount of the principal and all of the interest are totally paid off and the balance is zero.

What do borrowers use to secure a mortgage?

What borrowers use to secure a mortgage loan are credit card and down payment. To get your mortgage approved you need to check your credit score first so you are sure that everything is in order.

What percentage of the purchase price is usually the down payment?

The average down payment in America is equal to about 6% of the borrower’s loan value. However, it’s possible to buy a home with as little as 3% down depending on your loan type and credit score.

How much income do you need for a 200k mortgage?

How much income is needed for a 200k mortgage? + A $200k mortgage with a 4.5% interest rate over 30 years and a $10k down-payment will require an annual income of $54,729 to qualify for the loan.