Alberta Real Estate Licensing Exam Practice · Question
Maria is approved for a mortgage with a 5-year term and a 25-year amortization period. What does the 25-year amortization period specifically dictate regarding her mortgage?
The amortization period is the total length of time, in years, it would take to fully pay off a mortgage if all payments were made according to the original sch
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Question: Maria is approved for a mortgage with a 5-year term and a 25-year amortization period. What does the 25-year amortization period specifically dictate regarding her mortgage?
Answer options:
- The fixed interest rate period for her mortgage payments.
- The frequency at which she can renegotiate her mortgage terms. ✅ The total length of time it would take to pay off the entire mortgage balance if all payments were made as scheduled.
- The penalty she would incur for early mortgage repayment.
Correct answer: The total length of time it would take to pay off the entire mortgage balance if all payments were made as scheduled.
Explanation: The amortization period is the total length of time, in years, it would take to fully pay off a mortgage if all payments were made according to the original schedule. The term is the contractual period during which the specific interest rate and other conditions are locked in.
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