Question 1

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Accepted Answer

A) True 
 B)False  True

Question 2

Which one of these situations creates negative amortization?

Accepted Answer

A)  Increasing the amount of the monthly mortgage payment 
B)  Paying less than the monthly interest on a mortgage 
C)  Decreasing the amount paid into an escrow account 
D)  Lowering the mortgage interest rate 
E)  Decreasing the amount of the down payment 
A)  Increasing the amount of the monthly mortgage payment 
B)  Paying less than the monthly interest on a mortgage 
C)  Decreasing the amount paid into an escrow account 
D)  Lowering the mortgage interest rate 
E)  Decreasing the amount of the down payment B

Question 3

Which of the following is an example of a closing cost?

Accepted Answer

A)  Home inspection fees 
B)  Realtor fees 
C)  Earnest money 
D)  Title insurance 
E)  Down payment 
A)  Home inspection fees 
B)  Realtor fees 
C)  Earnest money 
D)  Title insurance 
E)  Down payment D

Question 4

Which home improvement is least likely to increase the value of your home?

Accepted Answer

A)  Energy efficient features 
B)  A remodeled kitchen 
C)  An extra bathroom 
D)  A converted basement 
E)  An exercise room 
A)  Energy efficient features 
B)  A remodeled kitchen 
C)  An extra bathroom 
D)  A converted basement 
E)  An exercise room

Question 5

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

Question 6

Ownership of an individual housing unit in a building is commonly called:

Accepted Answer

A)  a cooperative. 
B)  modular housing. 
C)  manufactured housing. 
D)  a condominium. 
E)  zoned housing. 
A)  a cooperative. 
B)  modular housing. 
C)  manufactured housing. 
D)  a condominium. 
E)  zoned housing.

Question 7

The purpose of a rate cap with an adjustable rate mortgage is to:

Accepted Answer

A)  minimize interest costs. 
B)  prevent changes in the amount of the monthly payment. 
C)  increase negative amortization. 
D)  restrict the amount by which the interest rate can increase. 
E)  lower the escrow account. 
A)  minimize interest costs. 
B)  prevent changes in the amount of the monthly payment. 
C)  increase negative amortization. 
D)  restrict the amount by which the interest rate can increase. 
E)  lower the escrow account.

Question 8

What is prepaid interest charged by a mortgage company called?

Accepted Answer

A)  Escrow 
B)  Points 
C)  Origination fee 
D)  Title fee 
E)  Deed 
A)  Escrow 
B)  Points 
C)  Origination fee 
D)  Title fee 
E)  Deed

Question 9

If you sell your home without a real estate agent, you should still employ the services of a(n):

Accepted Answer

A)  broker. 
B)  insurance agent. 
C)  lawyer. 
D)  contractor. 
E)  rental agent. 
A)  broker. 
B)  insurance agent. 
C)  lawyer. 
D)  contractor. 
E)  rental agent.

Question 10

The purpose of an appraisal is to:

Accepted Answer

A)  estimate the current value of a home. 
B)  reduce the amount paid for property taxes. 
C)  qualify for a reduced mortgage rate. 
D)  eliminate the need for home insurance. 
E)  reduce fees paid to realtor. 
A)  estimate the current value of a home. 
B)  reduce the amount paid for property taxes. 
C)  qualify for a reduced mortgage rate. 
D)  eliminate the need for home insurance. 
E)  reduce fees paid to realtor.

Question 11

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Accepted Answer

A)  Mortgage meltdown 
B)  Subprime crisis 
C)  Credit default swap 
D)  Credit score crisis 
E)  Mortgage balloon crisis 
A)  Mortgage meltdown 
B)  Subprime crisis 
C)  Credit default swap 
D)  Credit score crisis 
E)  Mortgage balloon crisis

Question 12

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

Accepted Answer

A) True 
 B)False

Question 13

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 answer of Gerry Intel is considering buying a home....

Question 14

A deed is the document that transfers ownership of the property from one person to another.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a conventional mortgage?

Accepted Answer

A)  An FHA mortgage 
B)  A buy-down 
C)  A fixed-rate mortgage 
D)  A shared-appreciation mortgage 
E)  A home equity loan 
A)  An FHA mortgage 
B)  A buy-down 
C)  A fixed-rate mortgage 
D)  A shared-appreciation mortgage 
E)  A home equity loan

Question 16

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

Accepted Answer

A)  6 
B)  9 
C)  13 
D)  17 
E)  22 
A)  6 
B)  9 
C)  13 
D)  17 
E)  22

Question 17

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n):

Accepted Answer

A)  conventional mortgage. 
B)  growing equity mortgage. 
C)  second mortgage. 
D)  reverse mortgage. 
E)  adjustable rate mortgage. 
A)  conventional mortgage. 
B)  growing equity mortgage. 
C)  second mortgage. 
D)  reverse mortgage. 
E)  adjustable rate mortgage.

Question 18

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Accepted Answer

A) True 
 B)False

Question 19

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. 
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.

Question 20

The purpose of zoning laws is to:

Accepted Answer

A)  restrict 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)  restrict 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.

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Which one of these situations creates negative amortization?

Which of the following is an example of a closing cost?

Which home improvement is least likely to increase the value of your home?

Ownership of an individual housing unit in a building is commonly called:

The purpose of a rate cap with an adjustable rate mortgage is to:

What is prepaid interest charged by a mortgage company called?

If you sell your home without a real estate agent, you should still employ the services of a(n):

The purpose of an appraisal is to:

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

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

A deed is the document that transfers ownership of the property from one person to another.

Which of the following is an example of a conventional mortgage?

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n):

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

The assessed value of your home is the:

The purpose of zoning laws is to:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 9: The Housing Decision: Factors and Finances

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Which one of these situations creates negative amortization?

Which of the following is an example of a closing cost?

Which home improvement is least likely to increase the value of your home?

Ownership of an individual housing unit in a building is commonly called:

The purpose of a rate cap with an adjustable rate mortgage is to:

What is prepaid interest charged by a mortgage company called?

If you sell your home without a real estate agent, you should still employ the services of a(n):

The purpose of an appraisal is to:

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

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

A deed is the document that transfers ownership of the property from one person to another.

Which of the following is an example of a conventional mortgage?

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n):

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

The assessed value of your home is the:

The purpose of zoning laws is to:

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters