Question 1

Which of the following would increase the equity in a home at a faster rate?

Accepted Answer

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)  Obtaining an interest-only mortgageF) A) and B)
G) C) and D)

Question 2

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 value increases
D)  Restricted lifestyle
E)  Home remodeling flexibilityF) A) and E)
G) C) and E)

Question 3

Which of the following is most commonly used as a base index for setting rates for adjustable rate mortgages?

Accepted Answer

A)  Federal Reserve Bank
B)  Karl's mortgage calculator
C)  Realtor.com
D)  London Interbank Offered Rate
E)  Bankrate.comF) A) and E)
G) C) and D)

Question 4

Michelle Duncan wants to know what price home she can afford.Her annual gross income is $45,000.She owes $750 per month on other debts and expects her property taxes and homeowners insurance to cost $250 per month.She knows she can get a 7.5%,30 year mortgage so her mortgage payment factor is 6.99.She expects to make a 20% down payment.What is Michelle's affordable home purchase price? Round your answer to the nearest $100.

Accepted Answer

A)  $76,000
B)  $60,800
C)  $304,000
D)  $42,500
E)  $254,800F) C) and D)
G) A) and E)

Question 5

A renter is required to pay a security deposit of $800,on which 4 percent interest will be paid.What amount would the person earn each year?

Accepted Answer

A)  $100
B)  $64
C)  $32
D)  $16
E)  $4F) None of the above
G) A) and E)

Question 6

Prepaid interest charged by a mortgage lender is called:

Accepted Answer

A)  Escrow
B)  Points
C)  Origination fee
D)  Title fee
E)  DeedF) A) and D)
G) B) and D)

Question 7

Private Mortgage Insurance is usually required if the down payment is less than _____ percent of the purchase price of the home.

Accepted Answer

A)  5
B)  8
C)  12
D)  15
E)  20F) D) and E)
G) All of the above

Question 8

The purpose of a security deposit is to:

Accepted Answer

A)  pay for any damages that may occur during the lease period.
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 D)
G) A) and B)

Question 9

Renting would be most appropriate for people who:

Accepted Answer

A)  want more tax deduction benefits.
B)  desire to do their own maintenance and repairs.
C)  have limited initial funds available.
D)  enjoy remodeling their residence.
E)  desire unmonitored parties.F) D) and E)
G) A) and B)

Question 10

The assessed value of your home is the:

Accepted Answer

A)  value used to calculate property taxes.
B)  estimated current market value.
C)  price you paid to purchase the home.
D)  amount of money a buyer has offered to purchase the home.
E)  cost basis assigned to your home by your insurance company.F) C) and E)
G) B) and C)

Question 11

Prefabricated homes 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 units that are partially assembled in factories.F) All of the above
G) B) and D)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an advantage of renting?

Accepted Answer

A)  Ease of mobility
B)  More financial benefits than home ownership
C)  Fewer responsibilities for maintenance and repairs
D)  Lower initial costs
E)  No expenses related to property taxesF) B) and E)
G) A) and E)

Question 14

Explain negative amortization and how such a situation can occur.

Accepted Answer

When payment amounts do not rise but int...

Question 15

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

Accepted Answer

In cooperative housing,the units in the ...

Question 16

What should you consider to determine the price you offer for a home?

Accepted Answer

The main factors to consider in a home p...

Question 17

Paula has completed a mortgage application and provided evidence of employment,income,assets owned,and existing debt to the potential lending institution.Although Paula has not even begun the process of looking at possible homes to buy,she is eagerly awaiting news from the lender as to whether she has been approved for a mortgage.In what stage of the application process is she?

Accepted Answer

A)  Appraisal
B)  Prequalification
C)  Assessment
D)  Amortization
E)  Home inspectionF) C) and E)
G) C) and D)

Question 18

Gerry Intel is considering buying a home.What actions would you recommend for her to take to accomplish this goal of buying a home?

Accepted Answer

The process of buying a home involves th...

Question 19

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) A) and E)
G) A) and D)

Question 20

Which of the following can help you prepare your home for selling?

Accepted Answer

A)  Moving furniture to the garage
B)  Painting worn exterior
C)  Closing the drapes when showing your home
D)  Trimming the grass around old vehicles in the yard
E)  Turning off the lights to conserve energy when showing your homeF) A) and D)
G) A) and C)

Exam 9: The Housing Decision: Factors and Finances

Which of the following can help you prepare your home for selling?

Correct Answer
verified

Prefabricated homes refers to:

Correct Answer
verified

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

Correct Answer
verified

The purpose of a security deposit is to:

Correct Answer
verified

A renter is required to pay a security deposit of $800,on which 4 percent interest will be paid.What amount would the person earn each year?

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not an advantage of renting?

Correct Answer
verified

Renting would be most appropriate for people who:

Correct Answer
verified

Which of the following is most commonly used as a base index for setting rates for adjustable rate mortgages?

Correct Answer
verified

Gerry Intel is considering buying a home.What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct Answer
verified
The process of buying a home involves th...
View Answer

Private Mortgage Insurance is usually required if the down payment is less than _____ percent of the purchase price of the home.

Correct Answer
verified

What should you consider to determine the price you offer for a home?

Correct Answer
verified
The main factors to consider in a home p...
View Answer

Which of the following would increase the equity in a home at a faster rate?

Correct Answer
verified

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

Correct Answer
verified
In cooperative housing,the units in the ...
View Answer

The assessed value of your home is the:

Correct Answer
verified

Explain negative amortization and how such a situation can occur.

Correct Answer
verified
When payment amounts do not rise but int...
View Answer

Correct Answer
verified

Prepaid interest charged by a mortgage lender is called:

Correct Answer
verified

Earnest money is used:

Correct Answer
verified

Exam 9: The Housing Decision: Factors and Finances

Which of the following can help you prepare your home for selling?

Correct AnswerverifiedShow Answer

Prefabricated homes refers to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The purpose of a security deposit is to:

Correct AnswerverifiedShow Answer

A renter is required to pay a security deposit of $800,on which 4 percent interest will be paid.What amount would the person earn each year?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not an advantage of renting?

Correct AnswerverifiedShow Answer

Renting would be most appropriate for people who:

Correct AnswerverifiedShow Answer

Which of the following is most commonly used as a base index for setting rates for adjustable rate mortgages?

Correct AnswerverifiedShow Answer

Gerry Intel is considering buying a home.What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct AnswerverifiedThe process of buying a home involves th...View AnswerShow Answer

Private Mortgage Insurance is usually required if the down payment is less than _____ percent of the purchase price of the home.

Correct AnswerverifiedShow Answer

What should you consider to determine the price you offer for a home?

Correct AnswerverifiedThe main factors to consider in a home p...View AnswerShow Answer

Which of the following would increase the equity in a home at a faster rate?

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 AnswerverifiedIn cooperative housing,the units in the ...View AnswerShow Answer

The assessed value of your home is the:

Correct AnswerverifiedShow Answer

Explain negative amortization and how such a situation can occur.

Correct AnswerverifiedWhen payment amounts do not rise but int...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Prepaid interest charged by a mortgage lender is called:

Correct AnswerverifiedShow Answer

Earnest money is used:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The process of buying a home involves th...
View Answer

Correct Answer
verified

Correct Answer
verified
The main factors to consider in a home p...
View Answer

Correct Answer
verified

Correct Answer
verified
In cooperative housing,the units in the ...
View Answer

Correct Answer
verified

Correct Answer
verified
When payment amounts do not rise but int...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified