Which of the following would increase the speed of equity growth for a homebuyer?
A)making a down payment of 10 percent instead of 20 percent
B)obtaining a mortgage interest rate of 9 percent instead of 8 percent
C)obtaining a 15-year mortgage instead of a 30-year mortgage
D)making larger deposits to the escrow account
E)making smaller deposit to the escrow account

Question

Quizplus · Accepted Answer

Obtaining a 15-year mortgage instead of a 30-year mortgage would increase the speed of equity growth for a homebuyer. With a 15-year mortgage, the homebuyer will pay off the mortgage faster and build equity quicker compared to a 30-year mortgage. This is because more of the principal is paid off each month, and less interest is paid overall. A larger down payment or making larger deposits to the escrow account may also help build equity faster, but they are not listed as options. A higher mortgage interest rate or smaller deposits to the escrow account would have the opposite effect and slow down the equity growth.

Which of the Following Would Increase the Speed of Equity