Colorado Real Estate Broker Exam — All Questions

All Property Ownership Land Use Controls & Regulations Valuation & Market Analysis Financing Contracts Agency Property Disclosures Property Management Transfer of Title Practice of Real Estate Real Estate Calculations Colorado Forms & Contracts Licensee Activities Brokerage Relationships Closing & Settlement Licensing Requirements Recordkeeping & Trust Accounts

1 questions

Financing

A borrower obtains a loan on which the interest rate stays fixed and each monthly payment fully repays principal and interest so the balance reaches zero at maturity. This describes a:

a.Balloon loan
b.Interest-only loan
c.Reverse annuity mortgage
d.Fully amortized fixed-rate loan✓

A fully amortized loan has level payments that cover all interest due and gradually reduce principal, leaving a zero balance at the end of the term. A balloon loan leaves a large lump sum due at maturity, and an interest-only loan does not reduce principal during the interest-only period. The fixed rate means the payment does not change with market rates.