Easy Mortgage Question?

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Which of the following is NOT true about Mortgages:

– Mortgages always have a fixed nominal interest rate

– Mortgages are examples of amortized loans

– The principal payment in an amortized loan is the residual balance

– The ending balance in an amortized loan contract will be zero

  1. Reply
    Age of Reason
    May 3, 2011 at 9:05 am

    Mortgages do NOT always have fixed rate

  2. Reply
    Let me steer you
    May 3, 2011 at 9:51 am

    Well, while mortgages always have a nominal interest rate, that interest rate is not fixed. It is always at least the prime plus a little more, but the Federal Reserve changes the prime interest rate all the time (the rate that the Federal Reserve charges banks and mortgage companies to borrow the money they loan you).

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