Question 1

A balloon mortgage has fixed monthly payments for a period of time.At the end of that time,the entire principal balance must be paid in full.

Accepted Answer

A) True 
 B)False

Question 2

Donald wanted to buy a house in the country,so he sought advice from his cousin Evan.Evan explained the advantages and disadvantages of home ownership; however,he had some information incorrect.Which of the following is incorrect?

Accepted Answer

A)   An advantage is that Donald can deduct mortgage interest and real estate taxes.
B)   A disadvantage is that Donald is responsible for maintenance and costs of repairs and home improvements.
C)   An advantage is that the down payment required is less than the security deposit for a rental.
D)   A disadvantage is that real estate taxes are a major expense for home owners.
E)   An advantage is that Donald can paint his house bright purple with green trim to match his college's colors.

Question 3

Frank and Diane want to buy a house.Which of the following do they need before they purchase a house?

Accepted Answer

A)   Down payment.
B)   Home owner's insurance.
C)   Mortgage interest.
D)   Mortgage principal.
E)   Real estate taxes.

Question 4

The owner/landlord is known as the

Accepted Answer

A)   Lease.
B)   Lessee.
C)   Lessor.
D)   Renter.
E)   Sublease.

Question 5

Trenton wants to buy a house but can provide only a 10% down payment.He probably will be required to have

Accepted Answer

A)   Amortization.
B)   Escrow.
C)   Lock.
D)   PMI.
E)   Points.

Question 6

If you pay an extra $100 per month on your mortgage,your total loan principal will decrease and your total interest will remain the same.

Accepted Answer

A) True 
 B)False

Question 7

Elaine purchased her living unit in a building with five other separate units.She purchased a

Accepted Answer

A)   Condominium.
B)   Duplex.
C)   Manufactured home.
D)   Single-family dwelling.
E)   Townhouse.

Question 8

The primary benefit of a home equity loan is

Accepted Answer

A)   Its limited availability.
B)   The deductibility of the loan interest on federal taxes.
C)   The required monthly payments.
D)   The use of the home as collateral for the loan.
E)   None of these is a primary benefit.

Question 9

If you have a $150,000 30-year 5% mortgage,how much of your first monthly payment of $805.50 would go toward principal?

Accepted Answer

A)   $180.50
B)   $625.00
C)   $665.28
D)   $805.50
E)   $7,500.00

Question 10

Private mortgage insurance is usually required if the down payment for a home is less than 30%.

Accepted Answer

A) True 
 B)False

Question 11

Given the information here,what is the total cost of renting per year?

Accepted Answer

A)   $14,400
B)   $14,700
C)   $14,710
D)   $164,400
E)   $164,700

Question 12

Which of the following is NOT correct?

Accepted Answer

A)   Renting is usually less expensive in the short run.
B)   Home ownership usually has long-term financial advantages.
C)   Lifestyle and financial factors should be analyzed to determine if you should rent or buy.
D)   Traditional financial guidelines suggest that your home should cost about five times your annual income.
E)   Renting offers mobility.

Question 13

A landlord has the right to sublet an apartment.

Accepted Answer

A) True 
 B)False

Question 14

Because Dan served in the army,he should be eligible for a(n)

Accepted Answer

A)   ARM.
B)   FHA loan.
C)   Negative amortization.
D)   Payment cap.
E)   VA loan.

Question 15

When Ingrid was selling her house,she contacted Gabe,her real estate agent,to help her with the sale.Gabe's services included all of the following except

Accepted Answer

A)   Negotiating a settlement price.
B)   Receiving an offer from a buyer.
C)   Representing Ingrid at the closing.
D)   Showing Ingrid's home to potential buyers.
E)   Home appraisal.

Question 16

When Nancy buys her house,the mortgage company will probably conduct a(n)

Accepted Answer

A)   Appraisal.
B)   Contingency clause.
C)   Dual agent.
D)   Earnest money.
E)   Purchase agreement.

Question 17

What are five things you can do to make the presentation of your home more favorable to buyers?

Accepted Answer

The effective presentation of your home ...

Question 18

Quinn applied for a loan.He provided information about his finances and the home he plans to purchase.Results of the mortgage calculation included all of the following except

Accepted Answer

A)   Expected maintenance costs.
B)   The home purchase price he can afford.
C)   The monthly mortgage payment he can afford.
D)   The mortgage amount he can afford.
E)   All of these are correct.

Question 19

Which of the following is NOT a benefit of home ownership?

Accepted Answer

A)   Stability of residence
B)   Personalized living location
C)   Deductibility of mortgage interest
D)   Deductibility of real estate taxes
E)   Maintenance and costs of repairs and home improvements

Question 20

Crystal is looking for a new apartment.What are her total annual costs associated with renting?

Accepted Answer

A)   $1,270
B)   $12,000
C)   $12,250
D)   $12,270
E)   $162,270

Exam 7: Selecting and Financing Housing

Trenton wants to buy a house but can provide only a 10% down payment.He probably will be required to have

Correct AnswerverifiedShow Answer

If you have a $150,000 30-year 5% mortgage,how much of your first monthly payment of $805.50 would go toward principal?

Correct AnswerverifiedShow Answer

When Nancy buys her house,the mortgage company will probably conduct a(n)

Correct AnswerverifiedShow Answer

Donald wanted to buy a house in the country,so he sought advice from his cousin Evan.Evan explained the advantages and disadvantages of home ownership; however,he had some information incorrect.Which of the following is incorrect?

Correct AnswerverifiedShow Answer

Given the information here,what is the total cost of renting per year?

Correct AnswerverifiedShow Answer

Frank and Diane want to buy a house.Which of the following do they need before they purchase a house?

Correct AnswerverifiedShow Answer

A landlord has the right to sublet an apartment.

Correct AnswerverifiedShow Answer

The owner/landlord is known as the

Correct AnswerverifiedShow Answer

What are five things you can do to make the presentation of your home more favorable to buyers?

Correct AnswerverifiedThe effective presentation of your home ...View AnswerShow Answer

Private mortgage insurance is usually required if the down payment for a home is less than 30%.

Correct AnswerverifiedShow Answer

When Ingrid was selling her house,she contacted Gabe,her real estate agent,to help her with the sale.Gabe's services included all of the following except

Correct AnswerverifiedShow Answer

If you pay an extra $100 per month on your mortgage,your total loan principal will decrease and your total interest will remain the same.

Correct AnswerverifiedShow Answer

Crystal is looking for a new apartment.What are her total annual costs associated with renting?

Correct AnswerverifiedShow Answer

Because Dan served in the army,he should be eligible for a(n)

Correct AnswerverifiedShow Answer

The primary benefit of a home equity loan is

Correct AnswerverifiedShow Answer

Which of the following is NOT correct?

Correct AnswerverifiedShow Answer

Elaine purchased her living unit in a building with five other separate units.She purchased a

Correct AnswerverifiedShow Answer

A balloon mortgage has fixed monthly payments for a period of time.At the end of that time,the entire principal balance must be paid in full.

Correct AnswerverifiedShow Answer

Which of the following is NOT a benefit of home ownership?

Correct AnswerverifiedShow Answer

Quinn applied for a loan.He provided information about his finances and the home he plans to purchase.Results of the mortgage calculation included all of the following except

Correct AnswerverifiedShow Answer

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The effective presentation of your home ...
View Answer

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