Question 1

Which of the following would not be included in closing costs?

Accepted Answer

A)  Points 
B)  Earnest money 
C)  Title charges 
D)  Recording fees 
A)  Points 
B)  Earnest money 
C)  Title charges 
D)  Recording fees B

Question 2

To determine how much home you can afford to purchase, you should not consider

Accepted Answer

A)  finding a Web site that has a good mortgage calculator. 
B)  looking at your budget, balance sheet, and income statement. 
C)  money you might receive if you win a small lottery. 
D)  consulting a loan officer. 
A)  finding a Web site that has a good mortgage calculator. 
B)  looking at your budget, balance sheet, and income statement. 
C)  money you might receive if you win a small lottery. 
D)  consulting a loan officer. C

Question 3

Most individuals pay for a home with a down payment of 5% or less and then obtain a mortgage to finance the rest.

Accepted Answer

A) True 
 B)False  False

Question 4

When homeowners expect that interest rates will rise, they prefer

Accepted Answer

A)  fixed-rate loans. 
B)  adjustable-rate mortgages. 
C)  balloon payment mortgages. 
D)  decreasing term mortgages. 
A)  fixed-rate loans. 
B)  adjustable-rate mortgages. 
C)  balloon payment mortgages. 
D)  decreasing term mortgages.

Question 5

Lucky Louie is putting together an offer on a previously owned home he wants to buy. The home has 2,200 square feet of living space and is priced at $225,000. Upon his inspection, the condition of the roof is not good, and the central air system is on its last leg. Louie estimates replacement costs for these two systems to be a minimum of $17,000. Recent comps in the neighborhood show a 2,400 square foot house in good condition having sold for $245,000 just one month ago. What should Louie offer?

Accepted Answer

A)  $225,000 
B)  $206,000 
C)  $207,500 
D)  Stay away from a house needing major system repairs. 
A)  $225,000 
B)  $206,000 
C)  $207,500 
D)  Stay away from a house needing major system repairs.

Question 6

A 15-year mortgage compared to a 30-year mortgage has all of the following, except

Accepted Answer

A)  a lower appraisal fee. 
B)  less interest over the life of the loan. 
C)  higher payments. 
D)  a faster buildup of equity. 
A)  a lower appraisal fee. 
B)  less interest over the life of the loan. 
C)  higher payments. 
D)  a faster buildup of equity.

Question 7

In determining the amount of down payment and monthly mortgage payments you can afford, you should maintain some extra funds for liquidity purposes to cover unanticipated bills.

Accepted Answer

A) True 
 B)False

Question 8

Use the following two columns of items to answer the matching questions below:
-Closing costs
A)title search and insurance, appraisal fee, and other costs
B)fees that are a percentage of the purchase price and are paid by the borrower to the lender to obtain a reduction in the interest rate

Accepted Answer

The answer of Use the following two columns of items...

Question 9

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Accepted Answer

A) True 
 B)False

Question 10

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

Accepted Answer

A) True 
 B)False

Question 11

In addition to closing costs, real estate agent fees of more than 10% are charged when you buy a home.

Accepted Answer

A) True 
 B)False

Question 12

Condominiums have the advantages of sharing expenses among owners and giving the owners more privacy than single-family homes.

Accepted Answer

A) True 
 B)False

Question 13

All of the following are true of FHA loans, except

Accepted Answer

A)  they are provided by private lenders but guaranteed by the FHA. 
B)  they enable lower- and middle-income individuals to obtain mortgage financing. 
C)  they are required for mortgages larger than $300,000. 
D)  the borrower will have to escrow taxes and insurance. 
A)  they are provided by private lenders but guaranteed by the FHA. 
B)  they enable lower- and middle-income individuals to obtain mortgage financing. 
C)  they are required for mortgages larger than $300,000. 
D)  the borrower will have to escrow taxes and insurance.

Question 14

Condominium association monthly dues generally include water, sewer, garbage, and maintenance or other amenities such as a pool, clubhouse, and a tennis court.

Accepted Answer

A) True 
 B)False

Question 15

There are a number of different mortgage types to choose from in financing a house or condominium, such as fixed or variable loans for 15 or 30 years.

Accepted Answer

A) True 
 B)False

Question 16

Homeowner's association fees are not

Accepted Answer

A)  often used for security guards. 
B)  optional for homeowners in the area. 
C)  used to maintain common grounds. 
D)  often quite high and should be considered when buying a home. 
A)  often used for security guards. 
B)  optional for homeowners in the area. 
C)  used to maintain common grounds. 
D)  often quite high and should be considered when buying a home.

Question 17

When buying a home, which of the factors below should be considered in the decision process?

Accepted Answer

A)  Interior paint colors 
B)  Homeowner association covenants 
C)  How far away it is from the nearest mall 
D)  A, B and C are all key considerations. 
A)  Interior paint colors 
B)  Homeowner association covenants 
C)  How far away it is from the nearest mall 
D)  A, B and C are all key considerations.

Question 18

Purchasing a condominium is an alternative to purchasing a detached house but also requires careful consideration of selection criteria.

Accepted Answer

A) True 
 B)False

Question 19

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is true about condominiums?

Accepted Answer

A)  Each person owns a specific portion of the land on which a condominium is located. 
B)  Maintenance fees of common areas are shared. 
C)  They have more privacy than single family homes. 
D)  All of the above. 
A)  Each person owns a specific portion of the land on which a condominium is located. 
B)  Maintenance fees of common areas are shared. 
C)  They have more privacy than single family homes. 
D)  All of the above.

Which of the following would not be included in closing costs?

To determine how much home you can afford to purchase, you should not consider

Most individuals pay for a home with a down payment of 5% or less and then obtain a mortgage to finance the rest.

When homeowners expect that interest rates will rise, they prefer

A 15-year mortgage compared to a 30-year mortgage has all of the following, except

In determining the amount of down payment and monthly mortgage payments you can afford, you should maintain some extra funds for liquidity purposes to cover unanticipated bills.

Use the following two columns of items to answer the matching questions below: -Closing costs A)title search and insurance, appraisal fee, and other costs B)fees that are a percentage of the purchase price and are paid by the borrower to the lender to obtain a reduction in the interest rate

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

In addition to closing costs, real estate agent fees of more than 10% are charged when you buy a home.

Condominiums have the advantages of sharing expenses among owners and giving the owners more privacy than single-family homes.

All of the following are true of FHA loans, except

Condominium association monthly dues generally include water, sewer, garbage, and maintenance or other amenities such as a pool, clubhouse, and a tennis court.

There are a number of different mortgage types to choose from in financing a house or condominium, such as fixed or variable loans for 15 or 30 years.

Homeowner's association fees are not

When buying a home, which of the factors below should be considered in the decision process?

Purchasing a condominium is an alternative to purchasing a detached house but also requires careful consideration of selection criteria.

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Which of the following is true about condominiums?

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 10: Purchasing and Financing a Home

Which of the following would not be included in closing costs?

To determine how much home you can afford to purchase, you should not consider

Most individuals pay for a home with a down payment of 5% or less and then obtain a mortgage to finance the rest.

When homeowners expect that interest rates will rise, they prefer

A 15-year mortgage compared to a 30-year mortgage has all of the following, except

In determining the amount of down payment and monthly mortgage payments you can afford, you should maintain some extra funds for liquidity purposes to cover unanticipated bills.

Use the following two columns of items to answer the matching questions below: -Closing costs A)title search and insurance, appraisal fee, and other costs B)fees that are a percentage of the purchase price and are paid by the borrower to the lender to obtain a reduction in the interest rate

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

In addition to closing costs, real estate agent fees of more than 10% are charged when you buy a home.

Condominiums have the advantages of sharing expenses among owners and giving the owners more privacy than single-family homes.

All of the following are true of FHA loans, except

Condominium association monthly dues generally include water, sewer, garbage, and maintenance or other amenities such as a pool, clubhouse, and a tennis court.

There are a number of different mortgage types to choose from in financing a house or condominium, such as fixed or variable loans for 15 or 30 years.

Homeowner's association fees are not

When buying a home, which of the factors below should be considered in the decision process?

Purchasing a condominium is an alternative to purchasing a detached house but also requires careful consideration of selection criteria.

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Which of the following is true about condominiums?

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters