Which of the Following Statements About Interest-Only Mortgages Is Not

question 81

Multiple Choice

Which of the following statements about interest-only mortgages is not true?

• A) Interest-only mortgages cannot be Qualified Mortgages under The Consumer Financial Protection Bureau's rules.
• B) Mortgage payments may increase abruptly.
• C) Interest-only mortgages allow the borrower to pay only interest for the life of the mortgage.
• D) Interest-only mortgages were popular before the financial crisis.

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Definitions:

Amortize

The process of spreading out a loan or an intangible asset cost over a specific period of time for accounting and tax purposes.

Accumulated Depreciation

The total depreciation that has been applied to a fixed asset since it was acquired, representing the loss of value over time.

Balance Sheet

A financial record showing the balance of assets, liabilities, and equity of shareholders of an enterprise on a specific date.

Fair Market Value

The price that a property would sell for on the open market, between a willing buyer and a willing seller.