Which of the following statements about conventional mortgages is true? A. They

Question

Which of the following statements about conventional mortgages is true?

A. They are insured by the government.

B. The borrower may have to pay for mortgage insurance in order to borrow with a low down payment.

C. They usually have very low down payments.

D. The borrower is protected in case of default.

E. All of the above are true.

Amortizing a mortgage means that ______.

A. a long-term loan is converted to a short-term loan

B. the equity in the home declines as the loan is paid down

C. part of principal balance is repaid every period

D. interest must be paid every month

E. none of the above

Explanation / Answer

1. Option C is correct.

Reason: As Conventional Mortgage required only 3-5% down payment which is effectively very low.

2. Option C is correct

Reason: As year by year we will repay the amount of principal the mortgage will get reduced or amortized with such amount.

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