7. In mortgage loan terminology, what does "homeowner's equity" mean? a. fair market value of the property b. unpaid balance on the loan c. initial amount of money borrowed d. fair market value of the property minus outstanding loan balance 8. Which of the following situations describes a balloon mortgage? a. The fair market value of Edgar's house is less than the outstanding balance on his home loan. b. Sarah borrows $580,000 to buy a commercial property. Loan terms are r = 5.75%, 1= 15 years, monthly payments of $4.816 for 3 years, and then repayment of the entire balance due ($528,315) immediately thereafter. c. Jack owes Brown National Bank $75,530 on his home mortgage loan and negotiates a second home mortgage on the property for $20,000. d. Maxwell takes advantage of falling interest rates and refinances his home mortgage loan at a lower rate. 9. Bernard bought a house 5 years ago for $250,000 and financed the purchase with a $200,000 mortgage loan. The current appraised value of the house is $320,000. His outstanding loan balance today is $182,400. What is Bernard's current equity position? a. $137,600 b. $50,000 c. $120,000 d. $17,600 10. Cornelia's monthly mortgage payment (principal and interest) is $1,650. Annual property taxes are $2,310; annual homeowner's insurance, $786. How much is Cornelia's monthly PITI payment? a. $3,096 b. $258 c. $1,908 d. $4,746