Question 1

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Accepted Answer

A) True 
 B)False

Question 2

Owning a home entails all of the following expenses,except

Accepted Answer

A)  renter's insurance. 
B)  property taxes. 
C)  maintenance expenses. 
D)  lost interest on the down payment and closing costs. 
A)  renter's insurance. 
B)  property taxes. 
C)  maintenance expenses. 
D)  lost interest on the down payment and closing costs.

Question 3

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 4

Which of the following is not true?

Accepted Answer

A)  A conventional mortgage requires a 10-20% down payment. 
B)  With government-backed loans, the government insures the loan in the event of default. 
C)  Veterans Administration mortgages are extended to most first-time homebuyers. 
D)  Government-backed mortgages may require lower down payments than conventional mortgages. 
A)  A conventional mortgage requires a 10-20% down payment. 
B)  With government-backed loans, the government insures the loan in the event of default. 
C)  Veterans Administration mortgages are extended to most first-time homebuyers. 
D)  Government-backed mortgages may require lower down payments than conventional mortgages.

Question 5

One point on an $80,000 loan for the purchase of a $110,000 home would equal

Accepted Answer

A)  $100. 
B)  $800. 
C)  $1,000. 
D)  $1,100. 
A)  $100. 
B)  $800. 
C)  $1,000. 
D)  $1,100.

Question 6

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%?

Accepted Answer

A)  $50 
B)  $600 
C)  $2,500 
D)  $7,200 
A)  $50 
B)  $600 
C)  $2,500 
D)  $7,200

Question 7

During the financial crisis of 2008-2009,approximately ________% of subprime mortgages had late payments of at least 30 days.

Accepted Answer

A)  25 
B)  75 
C)  5 
D)  50 
A)  25 
B)  75 
C)  5 
D)  50

Question 8

When obtaining a mortgage you should

Accepted Answer

A)  apply for the maximum amount you can afford, since the house will be an appreciating asset. 
B)  let a real estate agent or some other expert choose the type and length of mortgage you will need. 
C)  maintain some funds for liquidity purposes to cover unanticipated bills. 
D)  be very conservative and apply only for a mortgage amount you can pay off within 10 years. 
A)  apply for the maximum amount you can afford, since the house will be an appreciating asset. 
B)  let a real estate agent or some other expert choose the type and length of mortgage you will need. 
C)  maintain some funds for liquidity purposes to cover unanticipated bills. 
D)  be very conservative and apply only for a mortgage amount you can pay off within 10 years.

Question 9

In negotiating for the purchase of a home,which of the following is unlikely to be included in the negotiating process?

Accepted Answer

A)  Possession date 
B)  Repairs that are to be made 
C)  A pile of wood for the fireplace 
D)  Cost of moving the buyer's possessions into the home 
A)  Possession date 
B)  Repairs that are to be made 
C)  A pile of wood for the fireplace 
D)  Cost of moving the buyer's possessions into the home

Question 10

You currently have a 5 year adjustable variable rate mortgage which is 4 years into the adjustment period.The current interest rate is 3.5% per annum,and the rate is indexed to the 10 year Treasury note which is currently yielding 2.15%.Most financial forecasters are anticipating rate increases over the 2016-2017 period,but there is no consensus on the total amount of the increases.Given the interest rate environment,what would be the best course of action for your mortgage?

Accepted Answer

A)  Double up on payments and pay it off in half of the term. 
B)  Refinance at the conventional 30 year fixed rate currently offered at 3.75%. 
C)  Stick with your existing mortgage since it is currently 3.5% and below the offered fixed rate. 
D)  Refinance into a 1 year ARM so that when rates decrease you will be in a better position. 
A)  Double up on payments and pay it off in half of the term. 
B)  Refinance at the conventional 30 year fixed rate currently offered at 3.75%. 
C)  Stick with your existing mortgage since it is currently 3.5% and below the offered fixed rate. 
D)  Refinance into a 1 year ARM so that when rates decrease you will be in a better position.

Question 11

Greg and Kathy are considering purchasing a home requiring an $85,000 mortgage.The payment on a 30-year mortgage for this amount is $605.The payment for a 15-year mortgage is $752.What is the additional amount of interest paid on the 30-year mortgage?

Accepted Answer

A)  $82,440 
B)  $52,920 
C)  $135,360 
D)  $26,460 
A)  $82,440 
B)  $52,920 
C)  $135,360 
D)  $26,460

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Owning a home entails all of the following expenses,except

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.

Which of the following is not true?

One point on an $80,000 loan for the purchase of a $110,000 home would equal

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%?

During the financial crisis of 2008-2009,approximately ________% of subprime mortgages had late payments of at least 30 days.

When obtaining a mortgage you should

In negotiating for the purchase of a home,which of the following is unlikely to be included in the negotiating process?

Greg and Kathy are considering purchasing a home requiring an $85,000 mortgage.The payment on a 30-year mortgage for this amount is $605.The payment for a 15-year mortgage is $752.What is the additional amount of interest paid on the 30-year mortgage?

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

One goal of mortgage financing should be selecting the type of mortgage that results in the highest interest expense.

Owning a home entails all of the following expenses,except

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.

Which of the following is not true?

One point on an $80,000 loan for the purchase of a $110,000 home would equal

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%?

During the financial crisis of 2008-2009,approximately ________% of subprime mortgages had late payments of at least 30 days.

When obtaining a mortgage you should

In negotiating for the purchase of a home,which of the following is unlikely to be included in the negotiating process?

Greg and Kathy are considering purchasing a home requiring an $85,000 mortgage.The payment on a 30-year mortgage for this amount is $605.The payment for a 15-year mortgage is $752.What is the additional amount of interest paid on the 30-year mortgage?

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