Question 1

Condominiums involve the purchase of an individual living unit rather than an entire building.

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

A cost associated with home buying would be

Accepted Answer

A)  appraisal. 
B)  property taxes. 
C)  legal fees. 
D)  A & B are correct. 
E)  A, B and C are correct. 
A)  appraisal. 
B)  property taxes. 
C)  legal fees. 
D)  A & B are correct. 
E)  A, B and C are correct. D

Question 4

Real estate agents will provide you with services and are paid commission on the selling of a home.

Accepted Answer

A) True 
 B)False

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

At the closing of home purchase, the "earnest" money has the purpose of:

Accepted Answer

A)  paying real estate property taxes. 
B)  reducing the mortgage interest rate. 
C)  paying a mortgage application fee. 
D)  paying the real estate agent's commission. 
E)  serving as evidence of serious intent. 
A)  paying real estate property taxes. 
B)  reducing the mortgage interest rate. 
C)  paying a mortgage application fee. 
D)  paying the real estate agent's commission. 
E)  serving as evidence of serious intent.

Question 7

The purpose of a rate cap with a variable 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

One significant drawback of home ownership is financial commitment.

Accepted Answer

A) True 
 B)False

Question 9

Lenders commonly use a TDS ratio of _________ and a GDS ratio of __________ to help determine the amount most people can comfortably afford for housing.

Accepted Answer

A)  20%; 30% 
B)  40%; 20% 
C)  40%; 30% 
D)  30%; 20% 
E)  20%; 40% 
A)  20%; 30% 
B)  40%; 20% 
C)  40%; 30% 
D)  30%; 20% 
E)  20%; 40%

Question 10

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

Accepted Answer

A)  100 
B)  80 
C)  60 
D)  40 
E)  20 
A)  100 
B)  80 
C)  60 
D)  40 
E)  20

Question 11

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 12

Condominiums involve the purchase of an entire building.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following are disadvantages of home ownership?

Accepted Answer

A)  limited responsibility 
B)  few financial benefits 
C)  low initial costs. 
D)  financial commitment. 
E)  lifestyle flexibility. 
A)  limited responsibility 
B)  few financial benefits 
C)  low initial costs. 
D)  financial commitment. 
E)  lifestyle flexibility.

Question 14

Qualifying for a mortgage is much different then obtaining other forms of credit.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

1. determining housing needs,

Question 17

Given the following, calculate the GDS ratio. All income and expense items are annual. $$\begin{array} { | l | r | l | r | } 
\hline \text { Gross income } & \mathbf { \$ 5 5 , 0 0 0 } & \text { Bank account } & \mathbf { \$ 1 , 0 0 0 } \
\hline \text { Net income } & \$ 38,000 & \text { Property taxes } & \$ 3,600 \
\hline \text { Heating } & \$ 4,800 & \text { Annual car payment } & \$ 4,200 \
\hline \text { Credit card balance } & \$ 2,500 & \text { Car loan balance } & \$ 10,000 \
\hline \text { Student loan payments } & \$ 2,400 & \text { Mortgage payments } & \$ 15,600 \
\hline
\end{array}$$

Accepted Answer

A)  28% 
B)  41% 
C)  44% 
D)  52% 
E)  63% 
A)  28% 
B)  41% 
C)  44% 
D)  52% 
E)  63%

Question 18

Most people select a place of residence based on available financial resources, needs, and lifestyle.

Accepted Answer

A) True 
 B)False

Question 19

If you decide to purchase a condominium for potential benefits you are probably:

Accepted Answer

A)  single parent. 
B)  young couple, no children. 
C)  couple, young children 
D)  young single 
E)  retired person. 
A)  single parent. 
B)  young couple, no children. 
C)  couple, young children 
D)  young single 
E)  retired person.

Question 20

What factors influence the type of housing a family will select?

Accepted Answer

Selection of housing is influe

Condominiums involve the purchase of an individual living unit rather than an entire building.

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

A cost associated with home buying would be

Real estate agents will provide you with services and are paid commission on the selling of a home.

A cooperative housing arrangement involves

At the closing of home purchase, the "earnest" money has the purpose of:

The purpose of a rate cap with a variable rate mortgage is to

One significant drawback of home ownership is financial commitment.

Lenders commonly use a TDS ratio of _ and a GDS ratio of __ to help determine the amount most people can comfortably afford for housing.

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

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

Condominiums involve the purchase of an entire building.

Which of the following are disadvantages of home ownership?

Qualifying for a mortgage is much different then obtaining other forms of credit.

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

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

Most people select a place of residence based on available financial resources, needs, and lifestyle.

If you decide to purchase a condominium for potential benefits you are probably:

What factors influence the type of housing a family will select?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source 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

Condominiums involve the purchase of an individual living unit rather than an entire building.

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

A cost associated with home buying would be

Real estate agents will provide you with services and are paid commission on the selling of a home.

A cooperative housing arrangement involves

At the closing of home purchase, the "earnest" money has the purpose of:

The purpose of a rate cap with a variable rate mortgage is to

One significant drawback of home ownership is financial commitment.

Lenders commonly use a TDS ratio of _________ and a GDS ratio of __________ to help determine the amount most people can comfortably afford for housing.

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

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

Condominiums involve the purchase of an entire building.

Which of the following are disadvantages of home ownership?

Qualifying for a mortgage is much different then obtaining other forms of credit.

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

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

Most people select a place of residence based on available financial resources, needs, and lifestyle.

If you decide to purchase a condominium for potential benefits you are probably:

What factors influence the type of housing a family will select?

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

The Banking Services of Financial Institutions

Introduction to Consumer Credit

Choosing a Source 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

Lenders commonly use a TDS ratio of _ and a GDS ratio of __ to help determine the amount most people can comfortably afford for housing.