Loan Capital: Mortgage - SS2 Accounting Past Questions and Answers - page 1

1

What is a mortgage?

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A

A loan used to buy a property

B

A loan used to pay for education

C

A loan used to start a business

D

None of the above

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2

What is the role of a mortgage in loan capital?

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A

To provide a way for people to finance the purchase of a property

B

To provide a way for people to pay for education

C

To provide a way for people to start a business

D

None of the above

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3

How is the interest rate on a mortgage determined?

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A

By the creditworthiness of the borrower

B

By the length of the loan term

C

By the current market interest rates

D

All of the above

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4

What happens if a borrower is unable to make their mortgage payments?

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A

The lender can take possession of the property

B

The lender forgives the debt

C

The borrower must pay a penalty fee

D

None of the above

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5

Who typically issues mortgages?

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A

Banks

B

Credit unions

C

Other financial institutions

D

All of the above

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6

What is equity in a home, and how is it built?

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7

What is foreclosure, and how does it relate to a mortgage?

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