Question 1

All the information,except ________,can be found on a variety of Web sites about mortgages.

Accepted Answer

A) projected rate increases 
B) loan rates,length of loan,and principal 
C) loan applications 
D) background on different mortgage companies 
A) projected rate increases 
B) loan rates,length of loan,and principal 
C) loan applications 
D) background on different mortgage companies A

Question 2

Which of the following is false about condominiums?

Accepted Answer

A) Association dues are required. 
B) An individual owner may mow the grass or make any repairs to the common areas when needed. 
C) They share common areas such as a pool,tennis court,and club house. 
D) They combine funds for maintenance. 
A) Association dues are required. 
B) An individual owner may mow the grass or make any repairs to the common areas when needed. 
C) They share common areas such as a pool,tennis court,and club house. 
D) They combine funds for maintenance. B

Question 3

In negotiating a price for the purchase of a home,you should do all except which of the following?

Accepted Answer

A) Offer the highest price you can afford first to get it settled quickly 
B) Write up a contract 
C) Realize this is a process 
D) Understand that realtors are brokers between the buyer and seller 
A) Offer the highest price you can afford first to get it settled quickly 
B) Write up a contract 
C) Realize this is a process 
D) Understand that realtors are brokers between the buyer and seller A

Question 4

Which of the following should not be considered when selecting a condominium?

Accepted Answer

A) Availability of companies that perform maintenance and repair services in the area 
B) Taxes 
C) Resale value 
D) Association dues 
A) Availability of companies that perform maintenance and repair services in the area 
B) Taxes 
C) Resale value 
D) Association dues

Question 5

Since there is no limit on how much and how fast adjustable rate mortgages (ARMs)can increase,most homeowners are afraid to take out this kind of loan.

Accepted Answer

A) True 
 B)False

Question 6

The term ARM stands for

Accepted Answer

A) alliance rated mortgage. 
B) adjustable-rate mortgage. 
C) American Realty Mortgage. 
D) American rated mortgage. 
A) alliance rated mortgage. 
B) adjustable-rate mortgage. 
C) American Realty Mortgage. 
D) American rated mortgage.

Question 7

For a conventional mortgage you will typically need a(n)________ of from 10% to 20% of the selling price of the home you are purchasing.

Accepted Answer

The answer of For a conventional mortgage you will typically...

Question 8

In determining the amount of down payment and monthly mortgage payments you can afford,you should maintain some extra funds for liquidity purposes to cover unanticipated bills.

Accepted Answer

A) True 
 B)False

Question 9

For a conventional mortgage,a lender typically requires a down payment of 10 to 20 percent of the home's selling price.

Accepted Answer

A) True 
 B)False

Question 10

Points paid at closing are for payment of

Accepted Answer

A) finance charges or interest. 
B) loan processing. 
C) property taxes. 
D) inspections. 
A) finance charges or interest. 
B) loan processing. 
C) property taxes. 
D) inspections.

Question 11

Describe some of the advantages and disadvantages of selling your home yourself instead of hiring a realtor.

Accepted Answer

Advantages: save 6 percent of your home

Question 12

In comparing a 30- and 50-year mortgage,over the life of the loan you will have smaller payments but pay more interest with the 30-year mortgage.

Accepted Answer

A) True 
 B)False

Question 13

Making extra mortgage payments does which of the following?

Accepted Answer

A) Increases the total amount of interest paid 
B) Reduces the length of the loan 
C) Decreases net worth 
D) Increases the points charged 
A) Increases the total amount of interest paid 
B) Reduces the length of the loan 
C) Decreases net worth 
D) Increases the points charged

Question 14

If you think interest rates will rise in the near future,you should seek an adjustable rate mortgage (ARM).

Accepted Answer

A) True 
 B)False

Question 15

In addition to closing costs,realtor fees of about 10 percent are charged when you buy a home.

Accepted Answer

A) True 
 B)False

Question 16

If the rent on an apartment is $600 per month,which is equal to a mortgage payment on a house,how much additional tax savings will you realize if $200 of the monthly mortgage payment is interest and your tax bracket is 25 percent?
(a)$50
(b)$600
(c)$2,500
(d)$7,200

Accepted Answer

(b)$200 monthly inte

Question 17

Most home purchases are made initially

Accepted Answer

A) with payments by personal check. 
B) with a 10 to 20 percent down payment and a mortgage. 
C) with a 5 percent down payment. 
D) with no down payment. 
A) with payments by personal check. 
B) with a 10 to 20 percent down payment and a mortgage. 
C) with a 5 percent down payment. 
D) with no down payment.

Question 18

To determine how much home you can afford to purchase,you should not consider

Accepted Answer

A) finding a good Internet page that has a mortgage calculator. 
B) looking at your budget,balance sheet,and income statement. 
C) possible future raises you will receive. 
D) consulting a loan officer. 
A) finding a good Internet page that has a mortgage calculator. 
B) looking at your budget,balance sheet,and income statement. 
C) possible future raises you will receive. 
D) consulting a loan officer.

Question 19

When selling a home,which of the following costs will you incur?

Accepted Answer

A) Loan origination fee 
B) Realtor's commission 
C) Title search and insurance 
D) Points 
A) Loan origination fee 
B) Realtor's commission 
C) Title search and insurance 
D) Points

Question 20

If you are not planning to stay in your current house for very long,________ would probably not be advantageous.

Accepted Answer

mortgage r

Exam 10: Purchasing and Financing a Home

All the information,except ________,can be found on a variety of Web sites about mortgages.

Which of the following is false about condominiums?

In negotiating a price for the purchase of a home,you should do all except which of the following?

Which of the following should not be considered when selecting a condominium?

Since there is no limit on how much and how fast adjustable rate mortgages (ARMs)can increase,most homeowners are afraid to take out this kind of loan.

The term ARM stands for

For a conventional mortgage you will typically need a(n)________ of from 10% to 20% of the selling price of the home you are purchasing.

In determining the amount of down payment and monthly mortgage payments you can afford,you should maintain some extra funds for liquidity purposes to cover unanticipated bills.

For a conventional mortgage,a lender typically requires a down payment of 10 to 20 percent of the home's selling price.

Points paid at closing are for payment of

Describe some of the advantages and disadvantages of selling your home yourself instead of hiring a realtor.

In comparing a 30- and 50-year mortgage,over the life of the loan you will have smaller payments but pay more interest with the 30-year mortgage.

Making extra mortgage payments does which of the following?

If you think interest rates will rise in the near future,you should seek an adjustable rate mortgage (ARM).

In addition to closing costs,realtor fees of about 10 percent are charged when you buy a home.

If the rent on an apartment is $600 per month,which is equal to a mortgage payment on a house,how much additional tax savings will you realize if $200 of the monthly mortgage payment is interest and your tax bracket is 25 percent? (a)$50 (b)$600 (c)$2,500 (d)$7,200

Most home purchases are made initially

To determine how much home you can afford to purchase,you should not consider

When selling a home,which of the following costs will you incur?

If you are not planning to stay in your current house for very long,________ would probably not be advantageous.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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