Question 1

The best time to get an ARM is when the market rates of interest are high.

Accepted Answer

A) True 
 B)False

Question 2

Which of these is not an advantage associated with an assumable loan?

Accepted Answer

A)  The new buyer does not incur the closing costs of a new loan. 
B)  The new buyer may be able to get a lower interest rate than the current market rate. 
C)  It is easier for the seller to sell the home. 
D)  The new buyer does not have to qualify for the loan. 
A)  The new buyer does not incur the closing costs of a new loan. 
B)  The new buyer may be able to get a lower interest rate than the current market rate. 
C)  It is easier for the seller to sell the home. 
D)  The new buyer does not have to qualify for the loan.

Question 3

A ________ typically originates mortgage loans with funds from other investors,such as pension funds.

Accepted Answer

A)  mortgage banker 
B)  mortgage broker 
C)  mortgagee 
D)  mortgagor 
E)  none of the above 
A)  mortgage banker 
B)  mortgage broker 
C)  mortgagee 
D)  mortgagor 
E)  none of the above

Question 4

Name the steps in smart buying.

Accepted Answer

Step 1: Differentiate want fro

Question 5

Private mortgage insurance protects the lender in the event that the borrower is unable to make the mortgage payments.

Accepted Answer

A) True 
 B)False

Question 6

According to the Keown book,how does a consumer avoid predatory lending?

Accepted Answer

A)  Regulation 
B)  Legal action 
C)  Knowledge 
D)  Steering 
A)  Regulation 
B)  Legal action 
C)  Knowledge 
D)  Steering

Question 7

Subprime,or nonprime,mortgages are taken out by borrowers with low credit scores,________ of these mortgages carry adjustable rates.

Accepted Answer

A)  10 percent 
B)  30 percent 
C)  50 percent 
D)  80 percent 
A)  10 percent 
B)  30 percent 
C)  50 percent 
D)  80 percent

Question 8

What are the common mortgage loan options?

Accepted Answer

-balloon payment
-graduated pa

Question 9

An appraisal is a typical but not required part of the mortgage approval process.

Accepted Answer

A) True 
 B)False

Question 10

PITI is a one-time,initial cost of home ownership.

Accepted Answer

A) True 
 B)False

Question 11

If you are the type of person who wants complete control over the style and decoration of your home,then a condominium or cooperative would be an appropriate housing decision for you.

Accepted Answer

A) True 
 B)False

Question 12

Leasing a car may make sense if you drive over 25,000 miles a year.

Accepted Answer

A) True 
 B)False

Question 13

A ________ is a middleman who,for a fee,secures mortgage loans for borrowers,but does not actually make those mortgage loans.

Accepted Answer

A)  mortgage banker 
B)  mortgage broker 
C)  mortgagee 
D)  mortgagor 
E)  none of the above 
A)  mortgage banker 
B)  mortgage broker 
C)  mortgagee 
D)  mortgagor 
E)  none of the above

Question 14

Most home owners have complete autonomy to remodel their dwelling to suit their own needs and tastes.

Accepted Answer

A) True 
 B)False

Question 15

Jackie is considering obtaining a mortgage of $333,000.A lower APR is available,but she must pay 1.75 points to buy the rate down.How much must Jackie pay in dollars?

Accepted Answer

A)  $1,357 
B)  $3,300 
C)  $5,828 
D)  $8,333 
A)  $1,357 
B)  $3,300 
C)  $5,828 
D)  $8,333

Question 16

Which should you consider when house hunting?

Accepted Answer

A)  The selling price 
B)  The neighborhood 
C)  The school district 
D)  All of the above 
A)  The selling price 
B)  The neighborhood 
C)  The school district 
D)  All of the above

Question 17

A loan origination fee is a fee paid to the lender,generally in the $1,200 to $1,300 range,and covers some of their costs of processing and finalizing the loan.

Accepted Answer

A) True 
 B)False

Question 18

Congratulations! You have just agreed on the final price for your new car and now you have to finance the purchase.The negotiated price of the new car is $18,500 and you will receive $5,500 for your trade-in.What will your monthly payment be on a 48-month loan with a 7% APR?

Accepted Answer

A)  $281.25 
B)  $311.30 
C)  $385.42 
D)  $443.01 
A)  $281.25 
B)  $311.30 
C)  $385.42 
D)  $443.01

Question 19

Hector a Maria have been married for almost one year now and are thinking about buying a house. Maria is an executive for a large, multi-national corporation with offices around the world. She has been told by her company that she will be transferred to a new location every three years. Hector is a car salesman and he is willing to move to wherever Maria gets transferred. Together they make $8,000 in gross monthly income and pay 40% in taxes and withholdings every month. Between them they have monthly payment of $400 in student loans and $700 in car loans, and their credit cards payments average $450 per month. They currently lease a luxury condo for $1,400 per month. They travel to Cancun every Christmas. Since they both work a lot of hours, they eat out at restaurants for most meals. They currently have nothing in savings but Hector's grandparents have said they will give them a 20% down payment for the new home.
-Based on their incomes,how large of a PITI can they comfortably afford to pay?

Accepted Answer

A)  Based on the 28 percent rule, they can afford $2,240 per month. 
B)  Based on the 36 percent rule, they can afford $2,880 per month. 
C)  Based on the 28 percent rule, they can afford $1,344 per month. 
D)  Based on the 36 percent rule, they can afford $1,728 per month. 
A)  Based on the 28 percent rule, they can afford $2,240 per month. 
B)  Based on the 36 percent rule, they can afford $2,880 per month. 
C)  Based on the 28 percent rule, they can afford $1,344 per month. 
D)  Based on the 36 percent rule, they can afford $1,728 per month.

Question 20

Name the items that are deposited in an escrow account.

Accepted Answer

A)  Principal, interest, title fee, insurance 
B)  Utility payments, homeowner's association dues 
C)  Property taxes, property insurance 
D)  PMI premiums, homeowner's association dues 
E)  Liens, closing costs, points 
A)  Principal, interest, title fee, insurance 
B)  Utility payments, homeowner's association dues 
C)  Property taxes, property insurance 
D)  PMI premiums, homeowner's association dues 
E)  Liens, closing costs, points

The best time to get an ARM is when the market rates of interest are high.

Which of these is not an advantage associated with an assumable loan?

A ________ typically originates mortgage loans with funds from other investors,such as pension funds.

Name the steps in smart buying.

Private mortgage insurance protects the lender in the event that the borrower is unable to make the mortgage payments.

According to the Keown book,how does a consumer avoid predatory lending?

Subprime,or nonprime,mortgages are taken out by borrowers with low credit scores,________ of these mortgages carry adjustable rates.

What are the common mortgage loan options?

An appraisal is a typical but not required part of the mortgage approval process.

PITI is a one-time,initial cost of home ownership.

If you are the type of person who wants complete control over the style and decoration of your home,then a condominium or cooperative would be an appropriate housing decision for you.

Leasing a car may make sense if you drive over 25,000 miles a year.

A ________ is a middleman who,for a fee,secures mortgage loans for borrowers,but does not actually make those mortgage loans.

Most home owners have complete autonomy to remodel their dwelling to suit their own needs and tastes.

Jackie is considering obtaining a mortgage of $333,000.A lower APR is available,but she must pay 1.75 points to buy the rate down.How much must Jackie pay in dollars?

Which should you consider when house hunting?

A loan origination fee is a fee paid to the lender,generally in the $1,200 to $1,300 range,and covers some of their costs of processing and finalizing the loan.

Congratulations! You have just agreed on the final price for your new car and now you have to finance the purchase.The negotiated price of the new car is $18,500 and you will receive $5,500 for your trade-in.What will your monthly payment be on a 48-month loan with a 7% APR?

Name the items that are deposited in an escrow account.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 8: The Home and Automobile Decision

The best time to get an ARM is when the market rates of interest are high.

Which of these is not an advantage associated with an assumable loan?

A ________ typically originates mortgage loans with funds from other investors,such as pension funds.

Name the steps in smart buying.

Private mortgage insurance protects the lender in the event that the borrower is unable to make the mortgage payments.

According to the Keown book,how does a consumer avoid predatory lending?

Subprime,or nonprime,mortgages are taken out by borrowers with low credit scores,________ of these mortgages carry adjustable rates.

What are the common mortgage loan options?

An appraisal is a typical but not required part of the mortgage approval process.

PITI is a one-time,initial cost of home ownership.

If you are the type of person who wants complete control over the style and decoration of your home,then a condominium or cooperative would be an appropriate housing decision for you.

Leasing a car may make sense if you drive over 25,000 miles a year.

A ________ is a middleman who,for a fee,secures mortgage loans for borrowers,but does not actually make those mortgage loans.

Most home owners have complete autonomy to remodel their dwelling to suit their own needs and tastes.

Jackie is considering obtaining a mortgage of $333,000.A lower APR is available,but she must pay 1.75 points to buy the rate down.How much must Jackie pay in dollars?

Which should you consider when house hunting?

A loan origination fee is a fee paid to the lender,generally in the $1,200 to $1,300 range,and covers some of their costs of processing and finalizing the loan.

Congratulations! You have just agreed on the final price for your new car and now you have to finance the purchase.The negotiated price of the new car is $18,500 and you will receive $5,500 for your trade-in.What will your monthly payment be on a 48-month loan with a 7% APR?

Name the items that are deposited in an escrow account.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Student and Consumer Loans: The Role of Planned Borrowing

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters