Question 1

Which of the following is an example of a conventional mortgage?

Accepted Answer

A)   An FHA mortgage
B)   A buy-down
C)   A fixed-rate mortgage
D)   A shared-appreciation mortgage
E)   A home equity loanF) A) and B)
G) A) and D)

Question 2

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

Accepted Answer

A)   6
B)   9
C)   13
D)   17
E)   22F) None of the above
G) A) and B)

Question 3

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Accepted Answer

A) True 
 B)False  True

Question 4

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Accepted Answer

A) True 
 B)False

Question 5

The purpose of a rate cap with an adjustable rate mortgage is to:

Accepted Answer

A)   minimize interest costs.
B)   prevent changes in the amount of the monthly payment.
C)   increase negative amortization.
D)   restrict the amount by which the interest rate can increase.
E)   lower the escrow account.F) A) and D)
G) None of the above

Question 6

The purpose of an appraisal is to:

Accepted Answer

A)   estimate the current value of a home.
B)   reduce the amount paid for property taxes.
C)   qualify for a reduced mortgage rate.
D)   eliminate the need for home insurance.
E)   reduce fees paid to realtor.F) C) and D)
G) B) and D)

Question 7

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

Accepted Answer

A) True 
 B)False

Question 8

The purpose of zoning laws is to:

Accepted Answer

A)   restrict property use.
B)   encourage new housing development.
C)   minimize people moving from an area.
D)   reduce real estate property taxes.
E)   assist real estate agents in finding homes for sale.F) A) and D)
G) A) and C)

Question 9

Which one of these situations creates negative amortization?

Accepted Answer

A)   Increasing the amount of the monthly mortgage payment
B)   Paying less than the monthly interest on a mortgage
C)   Decreasing the amount paid into an escrow account
D)   Lowering the mortgage interest rate
E)   Decreasing the amount of the down paymentF) A) and B)
G) B) and C) B

Question 10

If you sell your home without a real estate agent, you should still employ the services of a(n) :

Accepted Answer

A)   broker.
B)   insurance agent.
C)   lawyer.
D)   contractor.
E)   rental agent.F) A) and E)
G) C) and D)

Question 11

Gerry Intel is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Accepted Answer

The answer of Gerry Intel is considering buying a home....

Question 12

Michelle Duncan wants to know what price home she can afford. Her annual gross income is $45,000. She owes $750 per month on other debts and expects her property taxes and homeowners insurance to cost $250 per month. She knows she can get a 7.5%, 30 year mortgage so her mortgage payment factor is 6.99. She expects to make a 20% down payment. What is Michelle's affordable home purchase price? Round your answer to the nearest $100.

Accepted Answer

A)   $76,000
B)   $60,800
C)   $304,000
D)   $42,500
E)   $254,800F) A) and B)
G) A) and C)

Question 13

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Accepted Answer

A)   Mortgage meltdown
B)   Subprime crisis
C)   Credit default swap
D)   Credit score crisis
E)   Mortgage balloon crisisF) B) and E)
G) A) and C)

Question 14

A deed is the document that transfers ownership of the property from one person to another.

Accepted Answer

A) True 
 B)False

Question 15

Which home improvement is least likely to increase the value of your home?

Accepted Answer

A)   Energy efficient features
B)   A remodeled kitchen
C)   An extra bathroom
D)   A converted basement
E)   An exercise roomF) C) and E)
G) D) and E)

Question 16

What is prepaid interest charged by a mortgage company called?

Accepted Answer

A)   Escrow
B)   Points
C)   Origination fee
D)   Title fee
E)   DeedF) C) and D)
G) B) and C)

Question 17

Which of the following is an example of a closing cost?

Accepted Answer

A)   Home inspection fees
B)   Realtor fees
C)   Earnest money
D)   Title insurance
E)   Down paymentF) B) and D)
G) A) and C) D

Question 18

Ownership of an individual housing unit in a building is commonly called:

Accepted Answer

A)   a cooperative.
B)   modular housing.
C)   manufactured housing.
D)   a condominium.
E)   zoned housing.F) A) and B)
G) B) and E)

Question 19

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n) :

Accepted Answer

A)   conventional mortgage.
B)   growing equity mortgage.
C)   second mortgage.
D)   reverse mortgage.
E)   adjustable rate mortgage.F) A) and E)
G) B) and D)

Question 20

The assessed value of your home is the:

Accepted Answer

A)   value used to calculate property taxes.
B)   estimated current market value.
C)   price you paid to purchase the home.
D)   amount of money a buyer has offered to purchase the home.
E)   cost basis assigned to your home by your insurance company.F) All of the above
G) C) and D)

Exam 9: The Housing Decision: Factors and Finances

Which of the following is an example of a conventional mortgage?

Correct Answer
verified

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

Correct Answer
verified

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Correct Answer
verified
True

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Correct Answer
verified

The purpose of a rate cap with an adjustable rate mortgage is to:

Correct Answer
verified

The purpose of an appraisal is to:

Correct Answer
verified

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

Correct Answer
verified

The purpose of zoning laws is to:

Correct Answer
verified

Which one of these situations creates negative amortization?

Correct Answer
verified
B

If you sell your home without a real estate agent, you should still employ the services of a(n) :

Correct Answer
verified

Gerry Intel is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct Answer
verified

Correct Answer
verified

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Correct Answer
verified

A deed is the document that transfers ownership of the property from one person to another.

Correct Answer
verified

Which home improvement is least likely to increase the value of your home?

Correct Answer
verified

What is prepaid interest charged by a mortgage company called?

Correct Answer
verified

Which of the following is an example of a closing cost?

Correct Answer
verified
D

Ownership of an individual housing unit in a building is commonly called:

Correct Answer
verified

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n) :

Correct Answer
verified

The assessed value of your home is the:

Correct Answer
verified

Exam 9: The Housing Decision: Factors and Finances

Which of the following is an example of a conventional mortgage?

Correct AnswerverifiedShow Answer

If closing costs of $1,400 are associated with the refinance of a mortgage that would reduce the monthly payment from $980 to $870, it would take approximately ____ months to cover these costs.

Correct AnswerverifiedShow Answer

Negotiating a purchase price for a home usually involves an offer and counteroffers.

Correct AnswerverifiedTrue

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Correct AnswerverifiedShow Answer

The purpose of a rate cap with an adjustable rate mortgage is to:

Correct AnswerverifiedShow Answer

The purpose of an appraisal is to:

Correct AnswerverifiedShow Answer

Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid lower home value after your purchase.

Correct AnswerverifiedShow Answer

The purpose of zoning laws is to:

Correct AnswerverifiedShow Answer

Which one of these situations creates negative amortization?

Correct AnswerverifiedB

If you sell your home without a real estate agent, you should still employ the services of a(n) :

Correct AnswerverifiedShow Answer

Gerry Intel is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the name commonly used to refer to the recent national crisis in which with many mortgages were issued to borrowers with poor credit histories, resulting in numerous loan defaults?

Correct AnswerverifiedShow Answer

A deed is the document that transfers ownership of the property from one person to another.

Correct AnswerverifiedShow Answer

Which home improvement is least likely to increase the value of your home?

Correct AnswerverifiedShow Answer

What is prepaid interest charged by a mortgage company called?

Correct AnswerverifiedShow Answer

Which of the following is an example of a closing cost?

Correct AnswerverifiedD

Ownership of an individual housing unit in a building is commonly called:

Correct AnswerverifiedShow Answer

A loan based on the equity of the home that provides the homeowner with tax-free income and which is paid back when the home is sold is called a(n) :

Correct AnswerverifiedShow Answer

The assessed value of your home is the:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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D

Correct Answer
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Correct Answer
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Correct Answer
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