Question 1

On the purchase of a home,one "point" is equal to

Accepted Answer

A)  $100. 
B)  $1,000. 
C)  1% of the amount being financed. 
D)  1% of the purchase price. 
A)  $100. 
B)  $1,000. 
C)  1% of the amount being financed. 
D)  1% of the purchase price.

Question 2

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Accepted Answer

A) True 
 B)False

Question 3

Nathaniel and Kimberly want to make an offer on a 2,200 square foot home that is priced at $212,000.They research other home prices and find the following information: a 2,400 square foot home sold for $220,000; a 1,800 square foot home sold for $168,000; a 2,000 square foot home sold for $185,000.Based on your analysis,what reasonable offer should Nathaniel and Kimberly make on the house? (Round all computations to the nearest dollar.)

Accepted Answer

A)  $212,000 
B)  $200,400 
C)  $204,600 
D)  $194,000 
A)  $212,000 
B)  $200,400 
C)  $204,600 
D)  $194,000

Question 4

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

mortgage r

Question 6

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 7

Before you buy a house,you should conduct a(n)________ to determine if the price is comparable to similar houses in the area.

Accepted Answer

The answer of Before you buy a house,you should conduct...

Question 8

All of the following are true of FHA loans,except

Accepted Answer

A)  they are provided by private lenders but guaranteed by the FHA. 
B)  they enable lower and middle income individuals to obtain mortgage financing. 
C)  they are required for mortgages larger than $300,000. 
D)  it is another name for title insurance. 
A)  they are provided by private lenders but guaranteed by the FHA. 
B)  they enable lower and middle income individuals to obtain mortgage financing. 
C)  they are required for mortgages larger than $300,000. 
D)  it is another name for title insurance.

Question 9

The type of home that probably would require the lowest maintenance is a (an)

Accepted Answer

A)  large home. 
B)  older home. 
C)  home built by a well-known construction company. 
D)  home with a large yard. 
A)  large home. 
B)  older home. 
C)  home built by a well-known construction company. 
D)  home with a large yard.

Question 10

When a mortgage lender provides loans to borrowers without sufficient income or a down payment,the lender is said to provide a ________ mortgage.

Accepted Answer

A)  VA 
B)  subprime 
C)  prime 
D)  FHA 
A)  VA 
B)  subprime 
C)  prime 
D)  FHA

Question 11

If you anticipate your income rising slowly but steadily over the years,you may want to consider a

Accepted Answer

A)  30-year fixed rate mortgage. 
B)  15-year ARM. 
C)  graduated payment mortgage. 
D)  balloon payment mortgage. 
A)  30-year fixed rate mortgage. 
B)  15-year ARM. 
C)  graduated payment mortgage. 
D)  balloon payment mortgage.

Question 12

Lucky Louie qualified for a $250,000 mortgage for his new home.The loan application was $400,closing attorney fee $500,appraisal fee $400,title insurance $1200,document fee $75,credit check $50.The loan requires a 1% origination fee plus 1 point ( 1 %)interest to buy down the rate.How much are Louie's total closing costs?

Accepted Answer

A)  $5,500 
B)  $7,625 
C)  WOW! 
D)  $5,125 
A)  $5,500 
B)  $7,625 
C)  WOW! 
D)  $5,125

Question 13

When homeowners expect that interest rates will rise,they prefer

Accepted Answer

A)  fixed rate loans. 
B)  adjustable rate mortgages. 
C)  balloon payment mortgages. 
D)  decreasing term mortgages. 
A)  fixed rate loans. 
B)  adjustable rate mortgages. 
C)  balloon payment mortgages. 
D)  decreasing term mortgages.

Question 14

Refinancing a home is usually worthwhile when

Accepted Answer

A)  interest rates have risen. 
B)  you can increase your monthly payment considerably. 
C)  you will live in your home long enough to recoup the closing costs. 
D)  you plan on moving in less than a year. 
A)  interest rates have risen. 
B)  you can increase your monthly payment considerably. 
C)  you will live in your home long enough to recoup the closing costs. 
D)  you plan on moving in less than a year.

Question 15

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 16

Which of the following is true about condominiums?

Accepted Answer

A)  Each person owns a portion of the land on which a condominium is located. 
B)  Maintenance fees of common areas are shared. 
C)  They have more privacy than single family homes. 
D)  All of the above. 
A)  Each person owns a portion of the land on which a condominium is located. 
B)  Maintenance fees of common areas are shared. 
C)  They have more privacy than single family homes. 
D)  All of the above.

Question 17

Fixed rate mortgages usually have

Accepted Answer

A)  the same interest rate. 
B)  an adjustable rate. 
C)  a balloon payment. 
D)  different monthly payments depending upon the interest rate. 
A)  the same interest rate. 
B)  an adjustable rate. 
C)  a balloon payment. 
D)  different monthly payments depending upon the interest rate.

Question 18

Which of the following is the primary reason that a mortgage lender may allow a rate modification to an existing mortgage holder with a fixed-rate mortgage?

Accepted Answer

A)  The lender receives a one-time fee. 
B)  The borrower may obtain a new mortgage from another lender. 
C)  The borrower receives a lower interest rate. 
D)  The borrower does not have to pay closing costs. 
A)  The lender receives a one-time fee. 
B)  The borrower may obtain a new mortgage from another lender. 
C)  The borrower receives a lower interest rate. 
D)  The borrower does not have to pay closing costs.

Question 19

When buying a home,all of the following are economic factors one should consider,except

Accepted Answer

A)  the existing interior paint colors. 
B)  resale value. 
C)  taxes. 
D)  maintenance. 
A)  the existing interior paint colors. 
B)  resale value. 
C)  taxes. 
D)  maintenance.

Question 20

The size of the monthly payment on a mortgage is not dependent on the

Accepted Answer

A)  principal borrowed. 
B)  interest rate. 
C)  maturity. 
D)  broker's commission. 
A)  principal borrowed. 
B)  interest rate. 
C)  maturity. 
D)  broker's commission.

On the purchase of a home,one "point" is equal to

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

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

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.

Before you buy a house,you should conduct a(n)________ to determine if the price is comparable to similar houses in the area.

All of the following are true of FHA loans,except

The type of home that probably would require the lowest maintenance is a (an)

When a mortgage lender provides loans to borrowers without sufficient income or a down payment,the lender is said to provide a ________ mortgage.

If you anticipate your income rising slowly but steadily over the years,you may want to consider a

When homeowners expect that interest rates will rise,they prefer

Refinancing a home is usually worthwhile when

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

Which of the following is true about condominiums?

Fixed rate mortgages usually have

Which of the following is the primary reason that a mortgage lender may allow a rate modification to an existing mortgage holder with a fixed-rate mortgage?

When buying a home,all of the following are economic factors one should consider,except

The size of the monthly payment on a mortgage is not dependent on 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

On the purchase of a home,one "point" is equal to

Refinancing a home requires you to pay many of the same costs as the original loan and should therefore be thoroughly investigated.

Caps on adjustable-rate mortgages refer only to the maximum fluctuation in interest rates.

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

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.

Before you buy a house,you should conduct a(n)________ to determine if the price is comparable to similar houses in the area.

All of the following are true of FHA loans,except

The type of home that probably would require the lowest maintenance is a (an)

When a mortgage lender provides loans to borrowers without sufficient income or a down payment,the lender is said to provide a ________ mortgage.

If you anticipate your income rising slowly but steadily over the years,you may want to consider a

When homeowners expect that interest rates will rise,they prefer

Refinancing a home is usually worthwhile when

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

Which of the following is true about condominiums?

Fixed rate mortgages usually have

Which of the following is the primary reason that a mortgage lender may allow a rate modification to an existing mortgage holder with a fixed-rate mortgage?

When buying a home,all of the following are economic factors one should consider,except

The size of the monthly payment on a mortgage is not dependent on 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