Question 1

Which of the following would increase the amount that a person could afford to spend on a home?

Accepted Answer

A) lower financial obligations 
B) increased interest rates 
C) increased down payment 
D) decreased family income 
E) increased monthly living expenses 
A) lower financial obligations 
B) increased interest rates 
C) increased down payment 
D) decreased family income 
E) increased monthly living expenses

Question 2

Variable rate mortgages with a rate cap prevent the borrower from having to pay an interest rate significantly higher than the one in the original agreement.

Accepted Answer

A) True 
 B)False

Question 3

Renting would be most appropriate for people who

Accepted Answer

A) have limited funds currently available. 
B) have difficulty establishing credit. 
C) want to reduce their taxes. 
D) enjoy remodeling their residence. 
E) desire the financial benefits of increased equity. 
A) have limited funds currently available. 
B) have difficulty establishing credit. 
C) want to reduce their taxes. 
D) enjoy remodeling their residence. 
E) desire the financial benefits of increased equity.

Question 4

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. 
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.

Question 5

A cooperative housing arrangement involves

Accepted Answer

A) government-supported rental units. 
B) a nonprofit organization. 
C) individual ownership of a living unit in a building. 
D) factory built and on-site assembly. 
E) housing units owned by a real estate developer. 
A) government-supported rental units. 
B) a nonprofit organization. 
C) individual ownership of a living unit in a building. 
D) factory built and on-site assembly. 
E) housing units owned by a real estate developer.

Question 6

Which of the following expenses is paid from an escrow account?

Accepted Answer

A) title insurance 
B) property insurance 
C) points 
D) loan application fee 
E) real estate agent's commission 
A) title insurance 
B) property insurance 
C) points 
D) loan application fee 
E) real estate agent's commission

Question 7

Current interest rates can affect the price of a home.

Accepted Answer

A) True 
 B)False

Question 8

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent, what are the effective annual rate and the effective monthly rate?

Accepted Answer

A) 4.5 percent, 1 percent 
B) 9 percent, 0.75 percent 
C) 9.2 percent, 0.736 percent 
D) 18.81 percent, 0.75 percent 
E) 18.81 percent.0.736 percent 
A) 4.5 percent, 1 percent 
B) 9 percent, 0.75 percent 
C) 9.2 percent, 0.736 percent 
D) 18.81 percent, 0.75 percent 
E) 18.81 percent.0.736 percent

Question 9

A cost associated with home buying would be

Accepted Answer

A) appraisal. 
B) home inspection. 
C) property appraisal. 
D) land transfer tax. 
E) all are cost associated with buying a house. 
A) appraisal. 
B) home inspection. 
C) property appraisal. 
D) land transfer tax. 
E) all are cost associated with buying a house.

Question 10

Step four of the home buying process is?

Accepted Answer

A) Determine home ownership needs 
B) Find and evaluate a property to purchase 
C) Price the property 
D) Obtain Financing 
E) Close the purchase transaction 
A) Determine home ownership needs 
B) Find and evaluate a property to purchase 
C) Price the property 
D) Obtain Financing 
E) Close the purchase transaction

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following would increase the speed of equity growth for a homebuyer?

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 20-year mortgage instead of a 25-year mortgage 
D) making larger deposits to the escrow account 
E) making smaller deposit to the escrow account 
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 20-year mortgage instead of a 25-year mortgage 
D) making larger deposits to the escrow account 
E) making smaller deposit to the escrow account

Question 13

The amount of the down payment will affect the amount of mortgage a person can afford.

Accepted Answer

A) True 
 B)False

Question 14

Closing costs are the fees and charges owed when making the decision to refinance a home.

Accepted Answer

A) True 
 B)False

Question 15

Step one of the home buying process is?

Accepted Answer

A) Determine home ownership needs 
B) Find and evaluate a property to purchase 
C) Price the property 
D) Obtain Financing 
E) Close the purchase transaction 
A) Determine home ownership needs 
B) Find and evaluate a property to purchase 
C) Price the property 
D) Obtain Financing 
E) Close the purchase transaction

Question 16

The purpose of zoning laws is to

Accepted Answer

A) restrictions on property use. 
B) encourage new housing development. 
C) minimize people moving from an area. 
D) reduce real estate property taxes. 
E) assist real estate agents in finding homes for sale. 
A) restrictions on property use. 
B) encourage new housing development. 
C) minimize people moving from an area. 
D) reduce real estate property taxes. 
E) assist real estate agents in finding homes for sale.

Question 17

The sub-prime mortgage crisis in 2007 was caused by

Accepted Answer

A) a housing bubble 
B) excessive risk taking by lenders and investors 
C) loose lending practices 
D) low interest rates 
E) all four factors contributed 
A) a housing bubble 
B) excessive risk taking by lenders and investors 
C) loose lending practices 
D) low interest rates 
E) all four factors contributed

Question 18

Which of the following would increase the amount that a person could afford to spend on a home?

Accepted Answer

A) higher financial obligations 
B) decreased interest rates 
C) increased down payment 
D) decreased family income 
E) increased monthly living expenses 
A) higher financial obligations 
B) decreased interest rates 
C) increased down payment 
D) decreased family income 
E) increased monthly living expenses

Question 19

Prepaid property tax and utility adjustments typically costs (for the purchase of a home)?

Accepted Answer

A) $200-300 
B) $750-1000 
C) $400-1500 
D) $500-2000 
E) $2,000 
A) $200-300 
B) $750-1000 
C) $400-1500 
D) $500-2000 
E) $2,000

Question 20

Belinda Williams plans to rent instead of buying her house.What advantage of renting will Belinda encounter?

Accepted Answer

A) tax advantages 
B) financial benefits 
C) community pride 
D) lower initial costs 
E) home improvement flexibility 
A) tax advantages 
B) financial benefits 
C) community pride 
D) lower initial costs 
E) home improvement flexibility

Which of the following would increase the amount that a person could afford to spend on a home?

Variable rate mortgages with a rate cap prevent the borrower from having to pay an interest rate significantly higher than the one in the original agreement.

Renting would be most appropriate for people who

The purpose of a counteroffer is to

A cooperative housing arrangement involves

Which of the following expenses is paid from an escrow account?

Current interest rates can affect the price of a home.

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent, what are the effective annual rate and the effective monthly rate?

A cost associated with home buying would be

Step four of the home buying process is?

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

Which of the following would increase the speed of equity growth for a homebuyer?

The amount of the down payment will affect the amount of mortgage a person can afford.

Closing costs are the fees and charges owed when making the decision to refinance a home.

Step one of the home buying process is?

The purpose of zoning laws is to

The sub-prime mortgage crisis in 2007 was caused by

Which of the following would increase the amount that a person could afford to spend on a home?

Prepaid property tax and utility adjustments typically costs (for the purchase of a home)?

Belinda Williams plans to rent instead of buying her house.What advantage of renting will Belinda encounter?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 7: The Finances of Housing

Which of the following would increase the amount that a person could afford to spend on a home?

Variable rate mortgages with a rate cap prevent the borrower from having to pay an interest rate significantly higher than the one in the original agreement.

Renting would be most appropriate for people who

The purpose of a counteroffer is to

A cooperative housing arrangement involves

Which of the following expenses is paid from an escrow account?

Current interest rates can affect the price of a home.

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent, what are the effective annual rate and the effective monthly rate?

A cost associated with home buying would be

Step four of the home buying process is?

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

Which of the following would increase the speed of equity growth for a homebuyer?

The amount of the down payment will affect the amount of mortgage a person can afford.

Closing costs are the fees and charges owed when making the decision to refinance a home.

Step one of the home buying process is?

The purpose of zoning laws is to

The sub-prime mortgage crisis in 2007 was caused by

Which of the following would increase the amount that a person could afford to spend on a home?

Prepaid property tax and utility adjustments typically costs (for the purchase of a home)?

Belinda Williams plans to rent instead of buying her house.What advantage of renting will Belinda encounter?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters