Exam 2: Managing Your Financial Resources - Purchasing and Financing a Home

An interest adjustment occurs when there is a difference between the date on which you take possession of your home and the date from which your lender calculates your first mortgage payment.

A house is sold for $300 000 and appraised for $285 000.What down payment will be needed to qualify for a conventional mortgage?

A house valued at $288 000 with a down payment of $63 000 will result in an extra charge for a high ratio mortgage.

For someone who has a $300 000 mortgage,at an interest rate of 6.3 percent,which mortgage would be the best choice for increasing one's net worth?

Online realtor services are more convenient,but usually charge higher commissions than traditional full-service real estate companies.

In choosing an open mortgage over a closed mortgage,you should consider the likelihood of being able to prepay principal to make up for the higher interest rate on the open mortgage.

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

Peter and Mary make a $25 000 down payment on a $400 000 home. CMHC charges the following rates on the loan to value ratio: Up to and including 80 percent,2.40 percent; up to 85 percent,2.80 percent; up to 90 percent,3.10 percent; up to 95 percent 4.00 percent. What will be the CMHC insurance premium? Illustrate the calculation on the loan insurance premium that Peter and Mary have to pay.

Which mortgage option is best in the following scenario.The Jones are purchasing their first home for $250000 and financing with a $200000 mortgage.They expect interest rates to stay the same for the next five years and have no prospects for any increase in their incomes.The prime rate is three percent.

If Adam's house was purchased for $280 000 five years ago and is worth $296000 now,and his mortgage was $224000 and amortized over 25 years,at four percent interest,compounded semi-annually,what is his equity in his house now? (To the nearest $1000)

Sharaz has gross household income of $3800 and wants to qualify for total monthly mortgage financing of $1330.Based on the gross debt service ratio,she should be approved.

A fixed-rate mortgage will have a set amount applied to the principal with each monthly payment.

Which of the following is not one of the closing costs in purchasing a home?

Which of the following is most accurate in a case where a seller neglects to disclose a defect that affects the market value of the home they are selling?

Due to the high interest rates charged,a vendor take-back mortgage is generally a worse option than a high ratio mortgage.

In order to qualify for a mortgage you must conform with both the gross debt service ratio and total debt service ratio.

Chuck obtained a mortgage of $90 000 to finance a $120 000 home.The title insurance will be $400,appraisal fee is $500,land transfer tax is one percent of the value of the property,legal fees are $900,and he will pay $900 to the movers and has planned to send $6000 on renovations.How much are his closing costs?

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

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

Which of the following is accurate regarding types of mortgages?