Question 1

Chin Woo bought a home for $160,000. He put down 20%. The mortgage is at 8 1/2% for 25 years. Using the table in the handbook, his yearly payments are:

Accepted Answer

A) $1,238.00 
B) $12,380.16 
C) $12,830.61 
D) $12,380.61 
E) None of these

Question 2

Bill Smoss buys a chalet for $285,000 in the White Mountains of New Hampshire. He puts down $15,000. At the time of closing, he must pay in addition 3 points. In dollars what does that represent in regard to the points?

Accepted Answer

The answer of Bill Smoss buys a chalet for $285,000...

Question 3

Lucy purchased a home. Her monthly payments are $1,534. Her annual real estate tax is $3,000 along with an annual insurance premium of $1,800. Lucy's bank requires that her monthly payments include an escrow deposit for the tax and insurance. What is the total payment each month for Lucy?

Accepted Answer

The answer of Lucy purchased a home. Her monthly payments...

Question 4

A larger down payment is needed for a 15-year fixed-rate mortgage than for a 30-year fixed-rate mortgage.

Accepted Answer

A) True 
 B)False

Question 5

Al Bank is worried about financing his new home. The house sells for $190,000. If he puts down 20%, what will Al's payment be at the following rates?
A. Monthly Payment and Total Cost of Loan given loan for 25 years at 10%
B. Monthly Payment and Total Cost of Loan given loan for 25 years at 10 ½%
C. Monthly Payment and Total Cost of Loan given loan for 25 years at 11%
D. Monthly Payment and Total Cost of Loan given loan for 25 years at 12%

Accepted Answer

The answer of Al Bank is worried about financing his...

Question 6

Abby's monthly payment is $781.60 per month. The principal is $80,000 at a rate of 11½% for 35 years. The principal reduction after the first mortgage payment is $14.93.

Accepted Answer

A) True 
 B)False

Question 7

Use the table provided in the handbook. With a mortgage of $91,000 at 12% for 25 years, by what amount is the principal reduced the first month?

Accepted Answer

The answer of Use the table provided in the handbook....

Question 8

Match the following terms with their definitions.
-Variable rate

Accepted Answer

A) Breakdown of principal and interest 
B) One-time up-front payment 
C) Mortgage payments rise in later years 
D) Loan 
E) Not fixed
F)Can prevent foreclosures
G)26 payments per year

Question 9

A variable rate mortgage is always fixed.

Accepted Answer

A) True 
 B)False

Question 10

Beverly Frost bought a home for $190,000 with a down payment of $19,000 at 7% for 25 years. Since then the rate has risen to 9%. How much more would her monthly payment be if she bought the house at 9%?

Accepted Answer

A) $208.97 
B) $436.40 
C) $143.00 
D) $227.43 
E) None of these

Question 11

Craig Hammer purchased a new condominium for $225,000. The bank required a $30,000 down payment. Assuming a rate of 8% on a 25-year mortgage, Craig's monthly payment is (use the table in the handbook):

Accepted Answer

A) $1,431.30 
B) $1,413.30 
C) $1,505.40 
D) $1,505.04 
E) None of these

Question 12

With a selling price of $125,000, a down payment of $20,000, and a mortgage rate of 10% for 30 years, if the loan was for 25 years, what would be the difference in the total interest cost of the loan?

Accepted Answer

The answer of With a selling price of $125,000, a...

Question 13

Tom Burke buys a home in Virginia for $139,000. He puts down 30% and obtains a mortgage for 25 years at 12%. The portion of the first payment that covers interest is:

Accepted Answer

A) $52.54 
B) $1,025.54 
C) $973.00 
D) $97.30 
E) None of these

Question 14

A biweekly mortgage results in six extra payments per year.

Accepted Answer

A) True 
 B)False

Question 15

The major portion of the monthly payment is used to pay off the principal.

Accepted Answer

A) True 
 B)False

Question 16

Calculate the balance outstanding after the first payment. Given: selling price of $150,000, one-third down, and an 11% mortgage for 25 years.

Accepted Answer

The answer of Calculate the balance outstanding after the first...

Question 17

Use the table provided in the handbook. Al Bang is worried about the financing of his new home. The house sells for $70,000. If he puts down 20%, what will Al's payment be, and what would be the total cost of interest over the cost of the loan for each assumption?
A. 25 years 12%
B. 25 years 13%
C. 25 years 13 3/4%
D. 25 years 14 3/4%

Accepted Answer

The answer of Use the table provided in the handbook....

Question 18

Use the table provided in the handbook. Janet Fence bought a home for $100,000 with a down payment of $20,000. The rate of interest was 7% for 35 years. Calculate (A)her payment per $1,000 and (B)her monthly mortgage payment.

Accepted Answer

The answer of Use the table provided in the handbook....

Question 19

Graduated payments result in the borrower paying:

Accepted Answer

A) More at the beginning of the mortgage 
B) Less at the beginning of the mortgage 
C) Less at the end of the mortgage 
D) The mortgage at 1/2 the standard rate 
E) None of these

Question 20

Bill's monthly payment is $1,056 per month. The principal is $100,000 at a rate of 12½% for 35 years. The amount of interest for Bill's first payment is $1,011.67.

Accepted Answer

A) True 
 B)False

Exam 15: The Cost of Home Ownership

Chin Woo bought a home for $160,000. He put down 20%. The mortgage is at 8 1/2% for 25 years. Using the table in the handbook, his yearly payments are:

Bill Smoss buys a chalet for $285,000 in the White Mountains of New Hampshire. He puts down $15,000. At the time of closing, he must pay in addition 3 points. In dollars what does that represent in regard to the points?

Lucy purchased a home. Her monthly payments are $1,534. Her annual real estate tax is $3,000 along with an annual insurance premium of $1,800. Lucy's bank requires that her monthly payments include an escrow deposit for the tax and insurance. What is the total payment each month for Lucy?

A larger down payment is needed for a 15-year fixed-rate mortgage than for a 30-year fixed-rate mortgage.

Abby's monthly payment is $781.60 per month. The principal is $80,000 at a rate of 11½% for 35 years. The principal reduction after the first mortgage payment is $14.93.

Use the table provided in the handbook. With a mortgage of $91,000 at 12% for 25 years, by what amount is the principal reduced the first month?

Match the following terms with their definitions. -Variable rate

A variable rate mortgage is always fixed.

Beverly Frost bought a home for $190,000 with a down payment of $19,000 at 7% for 25 years. Since then the rate has risen to 9%. How much more would her monthly payment be if she bought the house at 9%?

Craig Hammer purchased a new condominium for $225,000. The bank required a $30,000 down payment. Assuming a rate of 8% on a 25-year mortgage, Craig's monthly payment is (use the table in the handbook) :

With a selling price of $125,000, a down payment of $20,000, and a mortgage rate of 10% for 30 years, if the loan was for 25 years, what would be the difference in the total interest cost of the loan?

Tom Burke buys a home in Virginia for $139,000. He puts down 30% and obtains a mortgage for 25 years at 12%. The portion of the first payment that covers interest is:

A biweekly mortgage results in six extra payments per year.

The major portion of the monthly payment is used to pay off the principal.

Calculate the balance outstanding after the first payment. Given: selling price of $150,000, one-third down, and an 11% mortgage for 25 years.

Use the table provided in the handbook. Janet Fence bought a home for $100,000 with a down payment of $20,000. The rate of interest was 7% for 35 years. Calculate (A)her payment per $1,000 and (B)her monthly mortgage payment.

Graduated payments result in the borrower paying:

Bill's monthly payment is $1,056 per month. The principal is $100,000 at a rate of 12½% for 35 years. The amount of interest for Bill's first payment is $1,011.67.