Exam 7: Managing Your Financial Resources - Purchasing and Financing a Home

Loan protection life and disability insurance protects the lending institution against financial loss as a result of injury,illness,or death of the borrower.

A variable-rate mortgage (VRM)

For a $72 000 mortgage at nine percent,the monthly payments would be $730 for a 15-year mortgage and $579 for a 30-year mortgage.What would be the expected total savings in interest by taking a 15-year mortgage?

How are most home purchases initially funded?

Since real estate agents are licensed and bonded,they are required to give you unbiased information about real estate purchases.

What is the most important factor in determining the price of a home?

When is refinancing a home worthwhile?

For a 25-year mortgage of $300 000 with monthly payments of $1745 and interest rate of five percent compounded semi-annually,the amount of principle paid off over five years would be approximately $34 500.

To speed up the home-buying process,you should first give a verbal offer to see if the seller is willing to accept the price you are willing to offer.

If you have a lot of debt such as a car loan,student loan,line of credit and credit card balances which you carry from month to month,which will be most relevant in determining how much mortgage you can afford?

What is the purpose of getting a pre-approval certificate from a financial institution?

Malcolm has a down payment of $45 000 on a house valued at $200 000.He might be better off to borrow an additional $5000 on a personal loan to avoid the high ratio insurance premium.

Chuck obtained a mortgage of $90 000 to finance a $120 000 home.The title insurance will be $400,appraisal fee is $500,land transfer tax is one percent of the value of the property,legal fees are $900,and he will pay $900 to the movers and has planned to send $6000 on renovations.How much are his closing costs?

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

Which of the following is accurate regarding types of mortgages?

Which of the following options regarding a $200 000 mortgage,compounded semi-annually requires the lowest total interest payment?

The interest rate on a VRM may be adjusted

Describe some of the advantages and disadvantages of selling your home yourself instead of hiring a realtor.

Which mortgage option is best in the following scenario.The Jones are purchasing their first home for $250 000 and financing with a $200 000 mortgage.They expect interest rates to stay the same for the next five years and have no prospects for any increase in their incomes.The prime rate is three percent.

What should be the first step in the home-buying process?