Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the CAPS Exam with a comprehensive study of Module 2. Utilize our practice resources filled with flashcards, multiple choice questions, and thorough explanations to ensure your success!

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!

Practice this question and more.

Which of the following describes a fixed-rate loan?

A loan with varying interest rates over time
A loan with a constant interest rate for its entire term
A loan requiring full payment after a short period
A loan available only for commercial properties

The correct answer is: A loan with a constant interest rate for its entire term

A fixed-rate loan is characterized by having a constant interest rate that remains the same throughout the entire term of the loan. This means that the borrower can predict their monthly payments, as they won’t change due to fluctuations in market interest rates. This stability makes fixed-rate loans particularly appealing for long-term borrowing, as it allows homeowners and investors to plan their finances more effectively without worrying about changes in their payment obligations over time. The other choices highlight different types of loans or characteristics that do not apply to a fixed-rate loan. For example, a loan with varying interest rates over time pertains to variable or adjustable-rate loans, which can lead to unpredictable future payments. A loan requiring full payment after a short period describes a balloon loan, not a fixed-rate loan, and a loan available only for commercial properties points to a specific category of lending, rather than defining the structural integrity of a fixed-rate loan itself.