Question 1

Each of the following mortgage loans is for $155,000.The closing costs on each loan will be $4,200,and all points will be paid by the buyer.Which loan requires the most money to be paid up front at closing?

Accepted Answer

A) Adjustable-rate mortgage - 5 percent interest with 2 points 
B) FHA-insured mortgage - 7 percent interest with 1 point 
C) Conventional mortgage - 8 percent interest with 0 points 
D) All require the same amount at closing.

Question 2

Lenders use either a front-end or back-end ratio when setting limits on how much a home buyer can borrow.

Accepted Answer

A) True 
 B)False

Question 3

Real estate agents are usually paid by the buyer.

Accepted Answer

A) True 
 B)False

Question 4

A renter may have to pay ____ when moving into an apartment.

Accepted Answer

A) the first month's rent 
B) the last month's rent 
C) the security deposit 
D) All of these

Question 5

____ has (have) historically been favored by Americans as the most preferable housing alternative.

Accepted Answer

A) Single-family dwellings 
B) Condominiums 
C) Cooperatives 
D) Manufactured housing

Question 6

Sellers of homes generally set a sales asking price ____ percent higher than what they expect to get for it.

Accepted Answer

A) 0 to 5 
B) 5 to 10 
C) 5 to 15 
D) 15 to 20

Question 7

____ rarely appreciate(s) in value.

Accepted Answer

A) Mobile homes 
B) Condominiums 
C) Cooperatives 
D) Manufactured housing

Question 8

The actual transfer of ownership of real estate occurs at the closing.

Accepted Answer

A) True 
 B)False

Question 9

The longer the term of repayment on a mortgage loan,the more interest that is charged over the repayment period.

Accepted Answer

A) True 
 B)False

Question 10

A mortgage loan with a fixed rate of interest and a fixed payment for principal and interest that is available from a financial institution is called

Accepted Answer

A) an assumable mortgage. 
B) a conventional mortgage. 
C) seller financing. 
D) a lender buy-down mortgage.

Question 11

If you pay interest to borrow money from a family member to make the down payment on a home,you can only deduct that interest from your taxes if the down payment loan is secured by a lien on the property.

Accepted Answer

A) True 
 B)False

Question 12

Preforeclosure is the time between when the homeowner has been notified by the lender that he or she is in default and the actual foreclosure has been completed.

Accepted Answer

A) True 
 B)False

Question 13

The mortgage suited for someone who has his or her home completely paid for but needs cash to live on is the ____ mortgage.

Accepted Answer

A) biweekly 
B) shared-appreciation 
C) rollover 
D) reverse

Question 14

____ is when the home is financially and legally transferred to the new owner.

Accepted Answer

A) Foreclosure 
B) Closing 
C) Mortgage lock-in 
D) Deed day

Question 15

Martha and Gordon purchased a home for $175,000 six years ago with a 5.5 percent,30-year $140,000 mortgage.Their home now has a market value of $210,000 and they owe $134,000 on the mortgage.What is the equity in their home?

Accepted Answer

A) $76,000 
B) $70,000 
C) $41,000 
D) $35,000

Question 16

Legally,sellers must disclose known defects in their homes via a defect disclosure form.

Accepted Answer

A) True 
 B)False

Question 17

The amount borrowed under a mortgage loan divided by the initial purchase price is its

Accepted Answer

A) value-to-loan ratio. 
B) price-to-rent ratio. 
C) loan-to-value ratio. 
D) debt-to-equity ratio.

Question 18

____ is (are) generally part of the monthly house payment.

Accepted Answer

A) Principal and interest 
B) Real estate property taxes 
C) Homeowner's insurance premium 
D) All of these

Question 19

A loan origination fee,recording fee,and an appraisal fee are examples of miscellaneous expenses involved in buying a home.

Accepted Answer

A) True 
 B)False

Question 20

Title insurance to protect the ____ is usually required.

Accepted Answer

A) buyer 
B) lender 
C) seller 
D) buyer and lender

Exam 9: Obtaining Affordable Housing

Each of the following mortgage loans is for $155,000.The closing costs on each loan will be $4,200,and all points will be paid by the buyer.Which loan requires the most money to be paid up front at closing?

Lenders use either a front-end or back-end ratio when setting limits on how much a home buyer can borrow.

Real estate agents are usually paid by the buyer.

A renter may have to pay ____ when moving into an apartment.

____ has (have) historically been favored by Americans as the most preferable housing alternative.

Sellers of homes generally set a sales asking price ____ percent higher than what they expect to get for it.

____ rarely appreciate(s) in value.

The actual transfer of ownership of real estate occurs at the closing.

The longer the term of repayment on a mortgage loan,the more interest that is charged over the repayment period.

A mortgage loan with a fixed rate of interest and a fixed payment for principal and interest that is available from a financial institution is called

If you pay interest to borrow money from a family member to make the down payment on a home,you can only deduct that interest from your taxes if the down payment loan is secured by a lien on the property.

Preforeclosure is the time between when the homeowner has been notified by the lender that he or she is in default and the actual foreclosure has been completed.

The mortgage suited for someone who has his or her home completely paid for but needs cash to live on is the ____ mortgage.

____ is when the home is financially and legally transferred to the new owner.

Martha and Gordon purchased a home for $175,000 six years ago with a 5.5 percent,30-year $140,000 mortgage.Their home now has a market value of $210,000 and they owe $134,000 on the mortgage.What is the equity in their home?

Legally,sellers must disclose known defects in their homes via a defect disclosure form.

The amount borrowed under a mortgage loan divided by the initial purchase price is its

____ is (are) generally part of the monthly house payment.

A loan origination fee,recording fee,and an appraisal fee are examples of miscellaneous expenses involved in buying a home.

Title insurance to protect the ____ is usually required.