Unit 10 Housing Costs

Front

What is a mortgage loan?

Back

A mortgage loan is a type of loan specifically used to purchase real estate, where the property itself serves as collateral for the loan.

Front

How do you calculate the amount of a mortgage loan?

Back

To calculate the mortgage loan amount, subtract the down payment from the purchase price of the property.

Front

What is the assessed value of a property?

Back

The assessed value is the value assigned to a property by a tax assessor for the purpose of taxation, often based on a percentage of the market value.

Front

How do you calculate the assessed value of a home?

Back

To calculate the assessed value, multiply the market value of the home by the assessment rate.

Front

What is the formula for calculating monthly mortgage payments?

Back

The formula for calculating monthly mortgage payments is M = P[r(1+r)^n] / [(1+r)^n – 1], where M is the total monthly mortgage payment, P is the loan principal, r is the monthly interest rate, and n is the number of payments.

Front

What is the difference between principal and interest in a mortgage payment?

Back

Principal is the amount of money borrowed that needs to be repaid, while interest is the cost of borrowing that money, expressed as a percentage.

Front

What does a down payment represent in a home purchase?

Back

A down payment is the initial upfront payment made when purchasing a home, typically expressed as a percentage of the purchase price.

Front

What is the significance of the interest rate in a mortgage?

Back

The interest rate determines how much extra money will be paid on top of the principal over the life of the loan, affecting the total cost of the mortgage.

Front

How do you compare decimal numbers?

Back

To compare decimal numbers, align the decimal points and compare digit by digit from left to right, starting with the highest place value.

Front

What is the market value of a property?

Back

The market value is the estimated amount for which a property would sell in a competitive and open market.