1. Suppose you have a $1 million, 5% fixed rate mortgage with annual payments, a maturity of 30 years and a balloon payment of $750,000. What is your approximate annual payment?

a. $50,763 b. $51,763

c. $52,763 d. $53,763 e. none of the above

2. Suppose your annual income is $50,000 and your lender will allow you to have a mortgage payment that is no more than 33% of your monthly income after making other debt payments and paying property taxes, which in your case amount to $500 per month. If the current 30-year mortgage rate is 5%, approximately how large a mortgage can you qualify for (assuming you have the required cash for the necessary down payment)?

a. $160,000 b. $161,000 c. $162,000 d. $163,000 e. none of the above

3. Which of the following borrowers would be considered subprime. One with a FICO score of

a. 650

b. 675 c. 700 d. 750 e. none of above

4. Which of the following purchase mortgages?

I. FNMA II. FHLMC III. GNMA

a. I and II only b. I and III only c. II and III only d. all of the above e. none of the above