Question 1

In the decision to rent or purchase a home the ________ of any security deposit that you would put down on a rental home must be part of the decision.

Accepted Answer

opportunity cost

Question 2

One disadvantage of a neighborhood with a homeowner's association is that

Accepted Answer

A)  the association covenants can restrict how you decorate the outside of your home as well as what you store outside on the property. 
B)  the association often chooses the trash and other common service companies for all homeowners. 
C)  the association maintains the common area so homeowners do not have to. 
D)  the association pays for all homeowner's insurance. 
A)  the association covenants can restrict how you decorate the outside of your home as well as what you store outside on the property. 
B)  the association often chooses the trash and other common service companies for all homeowners. 
C)  the association maintains the common area so homeowners do not have to. 
D)  the association pays for all homeowner's insurance. A

Question 3

If the interest rate on your home mortgage will not change over the life of the loan you have a(n)________.

Accepted Answer

fixed-rate mortgage

Question 4

Points paid at closing represent

Accepted Answer

A)  a fee paid to the lender. 
B)  part of the loan principal. 
C)  the property tax rate. 
D)  the interest rate on the mortgage. 
A)  a fee paid to the lender. 
B)  part of the loan principal. 
C)  the property tax rate. 
D)  the interest rate on the mortgage.

Question 5

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 6

Which of the following would not be included in closing costs?

Accepted Answer

A)  Points 
B)  Earnest money 
C)  Title charges 
D)  Recording fees 
A)  Points 
B)  Earnest money 
C)  Title charges 
D)  Recording fees

Question 7

Since most of the problems have already been fixed,older homes usually have lower maintenance expense than newer homes.

Accepted Answer

A) True 
 B)False

Question 8

If you wish to keep your monthly payments as low and predictable as you can,you should use a

Accepted Answer

A)  15-year ARM. 
B)  30-year ARM. 
C)  15-year fixed rate. 
D)  30-year fixed rate. 
A)  15-year ARM. 
B)  30-year ARM. 
C)  15-year fixed rate. 
D)  30-year fixed rate.

Question 9

Before buying a house you should do the following.

Accepted Answer

A)  Have your real estate agent complete a market price analysis for comparable properties 
B)  Have a certified home inspector complete an inspection of the home inside and out 
C)  Check your budget to make sure the home including all associated costs is affordable 
D)  A, B and C are all important. 
A)  Have your real estate agent complete a market price analysis for comparable properties 
B)  Have a certified home inspector complete an inspection of the home inside and out 
C)  Check your budget to make sure the home including all associated costs is affordable 
D)  A, B and C are all important.

Question 10

Of the following fees involved in the purchase of a house,which is usually not borne by the purchaser?

Accepted Answer

A)  Title search and insurance 
B)  Appraisal fee 
C)  Real estate broker's commission 
D)  Loan application fee 
A)  Title search and insurance 
B)  Appraisal fee 
C)  Real estate broker's commission 
D)  Loan application fee

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

In addition to closing costs,real estate agent fees of more than 10% are charged when you buy a home.

Accepted Answer

A) True 
 B)False

Question 13

A point is a flat fee of $500 for each multiple of $100,000 that you finance on a new home.

Accepted Answer

A) True 
 B)False

Question 14

Describe some of the advantages and disadvantages of purchasing a home yourself instead of renting.

Accepted Answer

Advantages: Purchasing a home provides m

Question 15

Which of the following is not true concerning adjustable rate mortgages (ARMs)?

Accepted Answer

A)  There is usually a limit on how much a rate may increase per year. 
B)  There is usually no limit on how much a rate may increase per year. 
C)  There is usually a limit on how much a rate may increase over the life of the loan. 
D)  The maximum increase over the life of the loan is usually 5%. 
A)  There is usually a limit on how much a rate may increase per year. 
B)  There is usually no limit on how much a rate may increase per year. 
C)  There is usually a limit on how much a rate may increase over the life of the loan. 
D)  The maximum increase over the life of the loan is usually 5%.

Question 16

To simplify and speed up the home-buying process,you should first make a verbal offer to see if the seller is willing to take the price you are willing to offer.

Accepted Answer

A) True 
 B)False

Question 17

You are considering the purchase of a 2,300 square foot house that is being offered for $238,500.After researching recent home sales in the area,you find three that are comparable.The first was a 2,500 square foot home that sold for $225,000,the second was a 2,200 square foot home that sold for $200,000 and the third was a 2,000 square foot home that sold for $178,000.Based on your analysis,what would be a reasonable offer on the house? (Round all computations to the nearest dollar.)

Accepted Answer

A)  $210,000 
B)  $207,000 
C)  $205,000 
D)  $201,000 
A)  $210,000 
B)  $207,000 
C)  $205,000 
D)  $201,000

Question 18

The interest rate on an ARM may be adjusted

Accepted Answer

A)  once a year. 
B)  every three years. 
C)  every five years. 
D)  Any of the above depending on the terms of the loan. 
A)  once a year. 
B)  every three years. 
C)  every five years. 
D)  Any of the above depending on the terms of the loan.

Question 19

Chuck obtained a mortgage of $90,000 to finance a $120,000 home.The title search will be $400,appraisal fee $500,application fee $900,and he will pay 1% origination fee.How much are his closing costs?

Accepted Answer

A)  $900 
B)  $1,800 
C)  $2,700 
D)  $3,000 
A)  $900 
B)  $1,800 
C)  $2,700 
D)  $3,000

Question 20

An amortization schedule shows all but the

Accepted Answer

A)  principal portion of the payment. 
B)  interest portion of the payment. 
C)  increase in market value. 
D)  beginning and ending balances. 
A)  principal portion of the payment. 
B)  interest portion of the payment. 
C)  increase in market value. 
D)  beginning and ending balances.

In the decision to rent or purchase a home the ________ of any security deposit that you would put down on a rental home must be part of the decision.

One disadvantage of a neighborhood with a homeowner's association is that

If the interest rate on your home mortgage will not change over the life of the loan you have a(n)________.

Points paid at closing represent

The term ARM stands for

Which of the following would not be included in closing costs?

Since most of the problems have already been fixed,older homes usually have lower maintenance expense than newer homes.

If you wish to keep your monthly payments as low and predictable as you can,you should use a

Before buying a house you should do the following.

Of the following fees involved in the purchase of a house,which is usually not borne by the purchaser?

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

In addition to closing costs,real estate agent fees of more than 10% are charged when you buy a home.

A point is a flat fee of $500 for each multiple of $100,000 that you finance on a new home.

Describe some of the advantages and disadvantages of purchasing a home yourself instead of renting.

Which of the following is not true concerning adjustable rate mortgages (ARMs)?

To simplify and speed up the home-buying process,you should first make a verbal offer to see if the seller is willing to take the price you are willing to offer.

The interest rate on an ARM may be adjusted

Chuck obtained a mortgage of $90,000 to finance a $120,000 home.The title search will be $400,appraisal fee $500,application fee $900,and he will pay 1% origination fee.How much are his closing costs?

An amortization schedule shows all but the

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

Filters

Exam 10: Purchasing and Financing a Home

In the decision to rent or purchase a home the ________ of any security deposit that you would put down on a rental home must be part of the decision.

One disadvantage of a neighborhood with a homeowner's association is that

If the interest rate on your home mortgage will not change over the life of the loan you have a(n)________.

Points paid at closing represent

The term ARM stands for

Which of the following would not be included in closing costs?

Since most of the problems have already been fixed,older homes usually have lower maintenance expense than newer homes.

If you wish to keep your monthly payments as low and predictable as you can,you should use a

Before buying a house you should do the following.

Of the following fees involved in the purchase of a house,which is usually not borne by the purchaser?

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

In addition to closing costs,real estate agent fees of more than 10% are charged when you buy a home.

A point is a flat fee of $500 for each multiple of $100,000 that you finance on a new home.

Describe some of the advantages and disadvantages of purchasing a home yourself instead of renting.

Which of the following is not true concerning adjustable rate mortgages (ARMs)?

To simplify and speed up the home-buying process,you should first make a verbal offer to see if the seller is willing to take the price you are willing to offer.

The interest rate on an ARM may be adjusted

Chuck obtained a mortgage of $90,000 to finance a $120,000 home.The title search will be $400,appraisal fee $500,application fee $900,and he will pay 1% origination fee.How much are his closing costs?

An amortization schedule shows all but the

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

Filters