Question 1

A foreclosure happens when:

Accepted Answer

A) the rates of interest prevalent in the housing market are extremely volatile, forcing the lender to demand additional collateral from the borrower. 
B) the lenders attempt to recover loan balances from the insolvent borrowers by forcing the sale of the home pledged as collateral. 
C) the borrowers repay their housing loan well before the estimated closing period of the loan. 
D) the value of a house is higher than the loan taken on the property. 
E) the borrower is planning to restructure the loan taken for making mortgage payments.

Question 2

_____  are ongoing costs of home ownership.

Accepted Answer

A) Down payments 
B) Closing costs 
C) Taxes on capital gains 
D) Property taxes and insurance 
E) Rental payments

Question 3

The purchase price of the house you are buying is $140,000. A loan-to-value ratio of 80% will require a down payment of:

Accepted Answer

A) $34,000. 
B) $28,000. 
C) $108,000. 
D) $112,000. 
E) $20,000.

Question 4

A veteran might be able to buy a home with no down payment with a(n):

Accepted Answer

A) FHA mortgage insurance. 
B) VA loan guarantee. 
C) buydown. 
D) conventional mortgage. 
E) graduated-payment mortgage.

Question 5

Dick and Jane have just purchased a house and are calculating how much money they will need when the closing day rolls around. The purchase price is $200,000. They will make a 20% down payment, and they must pay two points on the loan. Closing costs should be 3% of the purchase price. What is the total dollar amount they will need at closing? (Show all work.)

Accepted Answer

The answer of Dick and Jane have just purchased a...

Question 6

If you purchase a house worth $110,000 and make a 10% down payment, how much would one mortgage point cost at closing?

Accepted Answer

A) $765 
B) $990 
C) $1,100 
D) $1,530 
E) $1,800

Question 7

_____ are loans offering low payments for the first few years, gradually increasing until year three or five, and then remaining fixed.

Accepted Answer

A) Reverse-annuity mortgages 
B) Fixed-rate mortgages 
C) Adjustable-rate mortgages 
D) Graduated-payment mortgages 
E) Rollover mortgages

Question 8

Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing the sales agreement.

Accepted Answer

A) True 
 B)False

Question 9

A real estate sales contract will include:

Accepted Answer

A) the amount you have paid as an earnest money deposit. 
B) the terms of a mortgage loan taken from a third party. 
C) expected home maintenance costs. 
D) the movement in the value of the property over the last 20 years. 
E) the current value of the properties in the neighboring locations.

Question 10

A type of financing made available by a builder or seller to a potential new-home buyer at interest rates well below market interest rates, often only for a short period, is termed a:

Accepted Answer

A) conventional mortgage. 
B) convertible ARM. 
C) buydown. 
D) two-step ARM. 
E) growing equity mortgage.

Question 11

In a co-op, the buyer receives title to a unit and joint ownership of the common areas.

Accepted Answer

A) True 
 B)False

Question 12

A behavioral bias in which an individual tends to allow an initial estimate (of value or price)to dominate the subsequent assessment (of value or price)regardless of new information to the contrary is called:

Accepted Answer

A) foreclosing. 
B) anchoring. 
C) depreciating. 
D) leasing. 
E) cooperating.

Question 13

_____ is a situation where homeowners owe more to the lenders than what their properties are worth.

Accepted Answer

A) Negative equity 
B) A foreclosure 
C) A restructure 
D) Inflation 
E) An expanded mortgage

Question 14

An escrow account is used to collect _____ from one's monthly mortgage payment.

Accepted Answer

A) interest 
B) principal 
C) real estate taxes 
D) closing costs 
E) operating expenses

Question 15

With prequalification, a buyer can:

Accepted Answer

A) negotiate a price lower than the quoted price on the property. 
B) correct any problems on his credit report. 
C) get a comprehensive list of all the suitable properties in a locality. 
D) bargain for additional time in a property deal. 
E) reduce the required down payment.

Question 16

The loss in the value of an automobile that occurs over its period of ownership is called:

Accepted Answer

A) reinsurance. 
B) the acquisition payment. 
C) the market price. 
D) the repurchase commission. 
E) depreciation.

Question 17

The _____  governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.

Accepted Answer

A) Equal Credit Opportunity Act 
B) Truth-in-Lending Act 
C) Real Estate Settlement Procedures Act 
D) Mortgage Lenders Act 
E) Tax Cut and Jobs Act of 2017

Question 18

The job of a mortgage banker is to locate conventional loans for clients.

Accepted Answer

A) True 
 B)False

Question 19

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. _____  will help him identify and correct any problems such as credit report errors that may arise on his application.

Accepted Answer

A) Prequalification 
B) A contingency clause 
C) A Multiple Listing Service 
D) The seller's financial institution 
E) A buyer ' s agent

Question 20

The _____ governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.

Accepted Answer

A) Equal Credit Opportunity Act 
B) Truth-in-Lending Act 
C) Real Estate Settlement Procedures Act 
D) Mortgage Lenders Act 
E) Real Estate Agents Act

Exam 5: Making Automobile and Housing Decisions

A foreclosure happens when:

_____ are ongoing costs of home ownership.

The purchase price of the house you are buying is $140,000. A loan-to-value ratio of 80% will require a down payment of:

A veteran might be able to buy a home with no down payment with a(n) :

If you purchase a house worth $110,000 and make a 10% down payment, how much would one mortgage point cost at closing?

_____ are loans offering low payments for the first few years, gradually increasing until year three or five, and then remaining fixed.

Lowballing is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates the price upward prior to signing the sales agreement.

A real estate sales contract will include:

A type of financing made available by a builder or seller to a potential new-home buyer at interest rates well below market interest rates, often only for a short period, is termed a:

In a co-op, the buyer receives title to a unit and joint ownership of the common areas.

A behavioral bias in which an individual tends to allow an initial estimate (of value or price) to dominate the subsequent assessment (of value or price) regardless of new information to the contrary is called:

_____ is a situation where homeowners owe more to the lenders than what their properties are worth.

An escrow account is used to collect _____ from one's monthly mortgage payment.

With prequalification, a buyer can:

The loss in the value of an automobile that occurs over its period of ownership is called:

The _____ governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.

The job of a mortgage banker is to locate conventional loans for clients.

Matt is considering the purchase of a condo on a mortgage. However, he is not sure of the amount of the mortgage he is eligible for. _____ will help him identify and correct any problems such as credit report errors that may arise on his application.

The _____ governs closings on owner-occupied houses, condominiums, and apartment buildings of four units or fewer.