Question 1

The reduction of a loan balance through payments made over a period of time is called:

Accepted Answer

A)   a buy-down.
B)   shared-appreciation.
C)   prepaid interest.
D)   amortization.
E)   a rate cap.

Question 2

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year. If they are in a 28 percent tax bracket, this deduction may reduce their taxable income by:

Accepted Answer

A)   $1,000.
B)   $2,240.
C)   $3,000.
D)   $4,000.
E)   $8,000.Taxable income is reduced by the $8,000 of mortgage interest.

Question 3

Condominiums involve the purchase of an individual living unit rather than an entire building.

Accepted Answer

A) True 
 B)False

Question 4

Refinancing of a mortgage is recommended when:

Accepted Answer

A)   interest rates rise.
B)   interest rates fall.
C)   the escrow account balance declines.
D)   two or more points are required by the lender at the time of closing.
E)   the escrow account balance increases.

Question 5

The amount of mortgage a person is eligible for would be increased by:

Accepted Answer

A)   decreasing the value of the collateral.
B)   lowering the down payment.
C)   increasing other debt obligations.
D)   lowering the family's income.
E)   decreasing the interest rate.

Question 6

Legislation that requires that loan applicants be given certain information, including an estimate of closing costs, before the closing is known as:

Accepted Answer

A)   the Real Estate Settlement Procedures Act.
B)   the Cooperative Lending Act.
C)   the Truth in Lending Act.
D)   the Title Insurance Act.
E)   the Real Estate Investment Act.

Question 7

A contract condition that states that the agreement is binding only if a certain event occurs is a(n) :

Accepted Answer

A)   dual agency.
B)   contingency clause.
C)   counteroffer.
D)   zoning law.
E)   prefabrication.

Question 8

A lease is a legal document that protects the rights of:

Accepted Answer

A)   the landlord
B)   the builder
C)   the realtor
D)   the tenant
E)   both the landlord and the tenant.

Question 9

What is the most popular type of home ownership?

Accepted Answer

A)   Condominium
B)   Duplex
C)   Cooperative
D)   Prefabricated home
E)   Single family dwelling

Question 10

The amount of the down payment will affect the amount of the monthly mortgage needed to purchase a home.

Accepted Answer

A) True 
 B)False

Question 11

Prepaid interest may be a part of a mortgage agreement.

Accepted Answer

A) True 
 B)False

Question 12

Private Mortgage Insurance (PMI)  is usually required if the down payment is less than _____ percent of the purchase price of the home.

Accepted Answer

A)   5
B)   8
C)   12
D)   15
E)   20

Question 13

What does it mean to sublet an apartment?

Accepted Answer

A)   Increase the rent
B)   Lower maintenance costs
C)   Convert the units to condominiums
D)   Meet certain government housing regulations
E)   Obtain another tenant to complete a lease period

Question 14

Which of these is a common financial benefit of home ownership?

Accepted Answer

A)   Low security deposit
B)   Tax deductibility of the down payment
C)   Amortization of the equity
D)   Increased property value
E)   No maintenance cost

Question 15

Which one of the following is an advantage of renting?

Accepted Answer

A)   Unrestricted lifestyle
B)   Tax benefits
C)   Fewer responsibilities
D)   An ability to build equity
E)   Increased equity

Question 16

Which of the following would increase the speed of equity growth for a homebuyer?

Accepted Answer

A)   Making a down payment of 10 percent instead of 20 percent
B)   Obtaining a mortgage interest rate of 9 percent instead of 8 percent
C)   Obtaining a 15-year mortgage instead of a 30-year mortgage
D)   Making larger deposits to the escrow account
E)   Obtaining an interest-only mortgage

Question 17

A VA-guaranteed loan program provides assistance to:

Accepted Answer

A)   military veterans.
B)   recent college graduates.
C)   low-income homebuyers.
D)   government employees.
E)   the elderly.

Question 18

Most people select a place of residence based on the following criteria:

Accepted Answer

A)   lifestyle.
B)   needs.
C)   financial resources.
D)   attitudes.
E)   All of these.

Question 19

John Ashford needs to sell his home because of a job transfer to another city. What actions should John take to sell his home?

Accepted Answer

1. Find a real estate agent: John should...

Question 20

A cost associated with home buying would be:

Accepted Answer

A)   renter's insurance.
B)   the security deposit.
C)   annual appreciation of the property.
D)   property taxes.
E)   interest lost on the security deposit.

Exam 9: The Housing Decision: Factors and Finances

A VA-guaranteed loan program provides assistance to:

Correct AnswerverifiedShow Answer

Condominiums involve the purchase of an individual living unit rather than an entire building.

Correct AnswerverifiedShow Answer

What is the most popular type of home ownership?

Correct AnswerverifiedShow Answer

Which of these is a common financial benefit of home ownership?

Correct AnswerverifiedShow Answer

What does it mean to sublet an apartment?

Correct AnswerverifiedShow Answer

The reduction of a loan balance through payments made over a period of time is called:

Correct AnswerverifiedShow Answer

The amount of mortgage a person is eligible for would be increased by:

Correct AnswerverifiedShow Answer

Which of the following would increase the speed of equity growth for a homebuyer?

Correct AnswerverifiedShow Answer

Legislation that requires that loan applicants be given certain information, including an estimate of closing costs, before the closing is known as:

Correct AnswerverifiedShow Answer

A lease is a legal document that protects the rights of:

Correct AnswerverifiedShow Answer

Private Mortgage Insurance (PMI) is usually required if the down payment is less than _____ percent of the purchase price of the home.

Correct AnswerverifiedShow Answer

A contract condition that states that the agreement is binding only if a certain event occurs is a(n) :

Correct AnswerverifiedShow Answer

Most people select a place of residence based on the following criteria:

Correct AnswerverifiedShow Answer

Which one of the following is an advantage of renting?

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Prepaid interest may be a part of a mortgage agreement.

Correct AnswerverifiedShow Answer

Refinancing of a mortgage is recommended when:

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John Ashford needs to sell his home because of a job transfer to another city. What actions should John take to sell his home?

Correct AnswerAnswered by ExamLex AI1. Find a real estate agent: John should...View AnswerShow Answer

Natasha and Al received a statement reporting that they paid $8,000 in mortgage interest during the past year. If they are in a 28 percent tax bracket, this deduction may reduce their taxable income by:

Correct AnswerverifiedShow Answer

The amount of the down payment will affect the amount of the monthly mortgage needed to purchase a home.

Correct AnswerverifiedShow Answer

A cost associated with home buying would be:

Correct AnswerverifiedShow Answer

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Answered by ExamLex AI
1. Find a real estate agent: John should...
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