Humber/Ontario Real Estate Course 2 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 2 Exam with our comprehensive quiz that covers essential concepts and topics. Enhance your understanding with multiple choice questions designed to test your knowledge and boost your confidence before the exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which statement accurately describes a fully-amortized loan?

The amortization period is longer than the term.
The amortization period is no longer than 20 years.
Mortgage payments are made strictly on a monthly basis.
The required payments repay the loan in full by its maturity date.

The correct answer is: The required payments repay the loan in full by its maturity date.

A fully-amortized loan is a type of loan where the required regular payments, usually monthly, are calculated in such a way that by the end of the loan term, the entire principal and interest will be paid off, resulting in zero balance on the loan. This means that the loan will be completely repaid by the maturity date. This is why the statement "The required payments repay the loan in full by its maturity date" accurately describes a fully-amortized loan. Option A is incorrect because in a fully-amortized loan, the amortization period is typically shorter than the term of the loan. Option B is incorrect as there is no strict rule on the maximum length of the amortization period for a fully-amortized loan. Option C is also incorrect because, while it is common for mortgage payments to be made on a monthly basis, this alone does not define a fully-amortized loan.