Question 1

Prefabricated housing refers to:

Accepted Answer

A)   nonprofit ownership.
B)   government leasing of living units.
C)   rental units available to government employees.
D)   ownership available to low-income individuals.
E)   housing partially assembled in factories.F) C) and D)
G) B) and C)

Question 2

Earnest money is used:

Accepted Answer

A)   to pay real estate property taxes.
B)   to reduce the mortgage interest rate.
C)   as evidence of good faith by a homebuyer.
D)   to pay the real estate agent's commission.
E)   to pay a mortgage application fee.F) D) and E)
G) B) and C)

Question 3

The purpose of a security deposit is to:

Accepted Answer

A)   pay for potential damages.
B)   cover the costs of utilities.
C)   pay for the tenant's portion of real estate property taxes.
D)   cover increases in monthly rent.
E)   meet government housing regulations for a safe building.F) B) and E)
G) B) and C)

Question 4

A newly married couple is having trouble affording a home. What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer?

Accepted Answer

A)   FHA-insured loan
B)   Balloon mortgage
C)   Buy-down
D)   Shared-appreciation mortgage
E)   Growing-equity mortgageF) A) and B)
G) All of the above

Question 5

The purpose of a counteroffer is to:

Accepted Answer

A)   negotiate the purchase price.
B)   reduce mortgage payments.
C)   lower real estate property taxes.
D)   avoid paying points at closing.
E)   avoid paying the real estate agent's commission.F) B) and E)
G) A) and C)

Question 6

A condominium involves:

Accepted Answer

A)   renting a mobile home.
B)   buying stock in a nonprofit organization.
C)   ownership of an individual living unit.
D)   government-subsidized housing.
E)   renting a house with the option to buy.F) C) and D)
G) B) and E)

Question 7

Many people believe that location is the most important factor to consider when selecting a home.

Accepted Answer

A) True 
 B)False

Question 8

Kate plans to rent instead of buying her housing. Which advantage of renting will she realize?

Accepted Answer

A)   Tax deductions
B)   Lower initial costs
C)   Property appreciation
D)   Restricted lifestyle
E)   Home improvement flexibilityF) All of the above
G) C) and D)

Question 9

What factors influence the type of housing a family will select?

Accepted Answer

The answer of What factors influence the type of housing...

Question 10

Current interest rates can affect the price of a home.

Accepted Answer

A) True 
 B)False

Question 11

Amortization refers to changes in the monthly payment for a variable rate mortgage.

Accepted Answer

A) True 
 B)False

Question 12

Home improvements may contribute more to the value of the home than the cost of the renovations.

Accepted Answer

A) True 
 B)False

Question 13

The Homeowners Protection Act requires that a PMI policy be terminated automatically when a homeowner's equity reaches _____ percent of the property value at the time the mortgage was executed.

Accepted Answer

A)   5
B)   9
C)   12
D)   18
E)   22F) A) and E)
G) B) and C)

Question 14

Differentiate between a cooperative and a condominium. Be sure to include a discussion of the ownership and responsibility for the common areas.

Accepted Answer

The answer of Differentiate between a cooperative and a condominium....

Question 15

An escrow account is designed to reduce the cost of a mortgage.

Accepted Answer

A) True 
 B)False

Question 16

Ease of mobility is an advantage of renting.

Accepted Answer

A) True 
 B)False

Question 17

An appraisal refers to the price for which a home has been sold.

Accepted Answer

A) True 
 B)False

Question 18

Money that is usually deposited with the lending institution for the payment of property taxes and homeowner's insurance is called:

Accepted Answer

A)   points.
B)   an escrow account.
C)   a rate cap.
D)   closing costs.
E)   a buy-down.F) D) and E)
G) B) and D)

Question 19

A payment cap keeps the payments on an adjustable-rate mortgage at a given level or limits the amount to which those payments can rise.

Accepted Answer

A) True 
 B)False

Question 20

The most common service provided by a real estate agent when selling your home is:

Accepted Answer

A)   providing legal advice.
B)   qualifying buyers for a mortgage.
C)   screening potential buyers.
D)   making needed repairs.
E)   attend home inspection.F) B) and E)
G) C) and D)

Exam 9: The Housing Decision: Factors and Finances

Prefabricated housing refers to:

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Kate plans to rent instead of buying her housing. Which advantage of renting will she realize?

Correct AnswerverifiedShow Answer

An escrow account is designed to reduce the cost of a mortgage.

Correct AnswerverifiedShow Answer

Current interest rates can affect the price of a home.

Correct AnswerverifiedShow Answer

Home improvements may contribute more to the value of the home than the cost of the renovations.

Correct AnswerverifiedShow Answer

A payment cap keeps the payments on an adjustable-rate mortgage at a given level or limits the amount to which those payments can rise.

Correct AnswerverifiedShow Answer

The purpose of a security deposit is to:

Correct AnswerverifiedShow Answer

What factors influence the type of housing a family will select?

Correct AnswerverifiedShow Answer

The most common service provided by a real estate agent when selling your home is:

Correct AnswerverifiedShow Answer

An appraisal refers to the price for which a home has been sold.

Correct AnswerverifiedShow Answer

Amortization refers to changes in the monthly payment for a variable rate mortgage.

Correct AnswerverifiedShow Answer

A condominium involves:

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The purpose of a counteroffer is to:

Correct AnswerverifiedShow Answer

Ease of mobility is an advantage of renting.

Correct AnswerverifiedShow Answer

Many people believe that location is the most important factor to consider when selecting a home.

Correct AnswerverifiedShow Answer

Differentiate between a cooperative and a condominium. Be sure to include a discussion of the ownership and responsibility for the common areas.

Correct AnswerverifiedShow Answer

Money that is usually deposited with the lending institution for the payment of property taxes and homeowner's insurance is called:

Correct AnswerverifiedShow Answer

Earnest money is used:

Correct AnswerverifiedShow Answer

The Homeowners Protection Act requires that a PMI policy be terminated automatically when a homeowner's equity reaches _____ percent of the property value at the time the mortgage was executed.

Correct AnswerverifiedShow Answer

A newly married couple is having trouble affording a home. What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer?

Correct AnswerverifiedShow Answer

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