5. When a monthly payment made by a borrower exceeds the amount required to service the loan, then normally the excess payment is applied to: a. more interest b. more principal c. the monthly payment which decreases the following month d. the monthly payment which increases the following month 6. The most popular or frequently selected mortgage loan by borrowers is: a. Constant Amortized Mortgage b. Adjustable-Rate Mortgage c. Fixed Rate Mortgage d. Graduated Payment Mortgage 7. The interest rate that legally needs to be disclosed to a borrower is the: a. Effective-interest rate for a 10-year holding period b. Internal Rate of Return earned by the lender for a requested time c. Annual Percentage Rate (APR) for the entire time of the loan d. All the above 8. A Reverse-Annuity mortgage (RAM): requires the borrower to be at least 62 years of age. a. True b. False 9. A lump-sum payment on a loan normally the next monthly payment due if no prior agreement between the parties has been reached: a. has no impact on b. increases the amount due for c. allows the borrow to skip d. lowers the prepayment penalty due and increases 10. A hybrid loan is normally which of the following combinations a: a. Constant Amortized Loan with an Adjustable-Rate Mortgage b. Constant Amortized Loan with a Reverse Annuity Mortgage c. Constant Payment Loan with an Adjustable-Rate Mortgage d. Graduated Payment Loan with a Constant Payment Mortgage