Crowdly

True

What is the main advantage of a fixed-rate mortgage compared to a variable-rate mortgage?

Lower initial interest rates

Protection from interest rate fluctuations

Easier approval process

No prepayment penalties

All of the above

Which of the following is NOT a key factor in determining a borrower’s creditworthiness?

Credit score

Debt-to-income ratio

Marital status

Employment history

None of the above

What is the purpose of mortgage refinancing?

To reduce monthly payments or secure a lower interest rate

To eliminate the need for a down payment

To increase the loan amount for spending

To extend the loan term indefinitely

Which type of loan is typically unsecured?

Auto loan

Personal loan

Home equity loan

All of the above

Which factor is typically used to determine mortgage affordability?

Income tax

Gross income

Debt service-to-income ratio (DSTI)

Interest rate only

None of the others

What is common a risk associated with variable or adjustable-rate mortgages (ARMs)?

Interest rates remain unchanged

Fixed repayment amounts

Interest rates may increase significantly over time

Higher initial interest rates

In the EU, there are standardised information sheets that allow:

Knowing the purpose of the loan

None of the others

Assessing and comparing loan offers

Have the contact details of the loan provider

Get a summary of loan conditions

When calculating an instalment, which of the following is NOT a relevant variable?

None of the others

Term or maturity

Loan amount

Closing costs

Interest rate

The APR/APRC allows to make comparisons and choose between loan proposals because:

It is calculated every year

It adds interest, principal and fees