Question 1

Legislation that requires that loan applicants be given certain information,including an estimate of closing costs,before the closing is known as:

Accepted Answer

A) Real Estate Settlement Procedures Act 
B) Cooperative Lending Act 
C) Truth in Lending Act 
D) Title Insurance Act 
E) Real Estate Investment Act 
A) Real Estate Settlement Procedures Act 
B) Cooperative Lending Act 
C) Truth in Lending Act 
D) Title Insurance Act 
E) Real Estate Investment Act

Question 2

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 3

Paula has completed a mortgage application and provided evidence of employment,income,and existing debt to the potential lending institution.Although Paula has not even begun the process of looking at possible homes to buy,she is eagerly awaiting news from the lender as to whether she has been approved for a mortgage.In what stage of the application process is she?

Accepted Answer

A) appraisal 
B) prequalification 
C) assessment 
D) amortization 
E) home inspection 
A) appraisal 
B) prequalification 
C) assessment 
D) amortization 
E) home inspection

Question 4

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

Question 5

John Ashford needs to sell his home because of a job transfer to another city.What actions should John take to sell his home?

Accepted Answer

1. Find a real estate agent: John should

Question 6

The most common service provided by a real estate agent when selling your home is:

Accepted Answer

A) providing legal advice. 
B) qualifying buyers for a mortgage. 
C) screening potential buyers. 
D) making needed repairs. 
E) attend home inspection. 
A) providing legal advice. 
B) qualifying buyers for a mortgage. 
C) screening potential buyers. 
D) making needed repairs. 
E) attend home inspection.

Question 7

A short-term mortgage with a very large final payment is called a ____________ mortgage.

Accepted Answer

A) balloon 
B) graduated-payment 
C) growing-equity 
D) shared-appreciation 
E) negative-amortization 
A) balloon 
B) graduated-payment 
C) growing-equity 
D) shared-appreciation 
E) negative-amortization

Question 8

A possible disadvantage of FHA and VA mortgages can be:

Accepted Answer

A) higher debt ratios for buyers. 
B) a longer processing time. 
C) loans may be assumable. 
D) the monthly payments can be higher than those of other mortgages. 
E) the high down payment requirements. 
A) higher debt ratios for buyers. 
B) a longer processing time. 
C) loans may be assumable. 
D) the monthly payments can be higher than those of other mortgages. 
E) the high down payment requirements.

Question 9

The purpose of a security deposit is to:

Accepted Answer

A) pay for potential damages. 
B) cover the costs of utilities. 
C) pay for the tenant's portion of real estate property taxes. 
D) cover increases in monthly rent. 
E) meet government housing regulations for a safe building. 
A) pay for potential damages. 
B) cover the costs of utilities. 
C) pay for the tenant's portion of real estate property taxes. 
D) cover increases in monthly rent. 
E) meet government housing regulations for a safe building.

Question 10

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year.If they are in a 28 percent tax bracket,this deduction may reduce their taxable income by:

Accepted Answer

A) $1,000. 
B) $2,240. 
C) $3,000. 
D) $4,000. 
E) $8,000. 
A) $1,000. 
B) $2,240. 
C) $3,000. 
D) $4,000. 
E) $8,000.

Question 11

Home improvements may contribute more to the value of the home than the cost of the renovations.

Accepted Answer

A) True 
 B)False

Question 12

Which one of the following is an advantage of renting?

Accepted Answer

A) unrestricted lifestyle 
B) tax benefits 
C) fewer responsibilities 
D) an ability to build equity 
E) increased equity 
A) unrestricted lifestyle 
B) tax benefits 
C) fewer responsibilities 
D) an ability to build equity 
E) increased equity

Question 13

A cost associated with home buying would be:

Accepted Answer

A) renter's insurance. 
B) the security deposit. 
C) annual appreciation of the property. 
D) property taxes. 
E) interest lost on the security deposit. 
A) renter's insurance. 
B) the security deposit. 
C) annual appreciation of the property. 
D) property taxes. 
E) interest lost on the security deposit.

Question 14

The amount of mortgage a person is eligible for would be increased by:

Accepted Answer

A) decreasing the value of the collateral 
B) lowering the down payment 
C) increasing other debt obligations 
D) lowering the family's income 
E) by decreasing the interest rate 
A) decreasing the value of the collateral 
B) lowering the down payment 
C) increasing other debt obligations 
D) lowering the family's income 
E) by decreasing the interest rate

Question 15

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

Accepted Answer

A) A condominium 
B) A duplex 
C) A cooperative 
D) A prefabricated home 
E) A mobile home 
A) A condominium 
B) A duplex 
C) A cooperative 
D) A prefabricated home 
E) A mobile home

Question 16

An appraisal refers to the price for which a home has been sold.

Accepted Answer

A) True 
 B)False

Question 17

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 18

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%,30year 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 19

The appraised value of your home is the:

Accepted Answer

A) value used to calculate property taxes. 
B) estimated current market value. 
C) the price you paid to purchase the home. 
D) amount of money a buyer has offered to purchase the home. 
E) cost remaining after the down payment. 
A) value used to calculate property taxes. 
B) estimated current market value. 
C) the price you paid to purchase the home. 
D) amount of money a buyer has offered to purchase the home. 
E) cost remaining after the down payment.

Question 20

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an):

Accepted Answer

A) walk-through. 
B) zoning evaluation. 
C) inspection. 
D) title search. 
E) handyman's special. 
A) walk-through. 
B) zoning evaluation. 
C) inspection. 
D) title search. 
E) handyman's special.

Legislation that requires that loan applicants be given certain information,including an estimate of closing costs,before the closing is known as:

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

Which one of these situations creates negative amortization?

John Ashford needs to sell his home because of a job transfer to another city.What actions should John take to sell his home?

The most common service provided by a real estate agent when selling your home is:

A short-term mortgage with a very large final payment is called a ____________ mortgage.

A possible disadvantage of FHA and VA mortgages can be:

The purpose of a security deposit is to:

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year.If they are in a 28 percent tax bracket,this deduction may reduce their taxable income by:

Home improvements may contribute more to the value of the home than the cost of the renovations.

Which one of the following is an advantage of renting?

A cost associated with home buying would be:

The amount of mortgage a person is eligible for would be increased by:

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

An appraisal refers to the price for which a home has been sold.

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

The appraised value of your home is the:

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an):

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

Legislation that requires that loan applicants be given certain information,including an estimate of closing costs,before the closing is known as:

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

Which one of these situations creates negative amortization?

John Ashford needs to sell his home because of a job transfer to another city.What actions should John take to sell his home?

The most common service provided by a real estate agent when selling your home is:

A short-term mortgage with a very large final payment is called a ____________ mortgage.

A possible disadvantage of FHA and VA mortgages can be:

The purpose of a security deposit is to:

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year.If they are in a 28 percent tax bracket,this deduction may reduce their taxable income by:

Home improvements may contribute more to the value of the home than the cost of the renovations.

Which one of the following is an advantage of renting?

A cost associated with home buying would be:

The amount of mortgage a person is eligible for would be increased by:

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

An appraisal refers to the price for which a home has been sold.

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

The appraised value of your home is the:

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an):

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