Question 1

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%,30year 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)  $254,800

Question 2

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an) :

Accepted Answer

A)  walk-through.
B)  zoning evaluation.
C)  inspection.
D)  title search.
E)  handyman's special.

Question 3

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 loan

Question 4

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)  by decreasing the interest rate

Question 5

The purpose of a security deposit is to:

Accepted Answer

A)  pay for potential damages.
B)  cover the costs of utilities.
C)  pay for the tenant's portion of real estate property taxes.
D)  cover increases in monthly rent.
E)  meet government housing regulations for a safe building.

Question 6

An appraisal refers to the price for which a home has been sold.

Accepted Answer

A) True 
 B)False

Question 7

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.

Question 8

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 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 payment

Question 10

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.

Question 11

The appraised value of your home is the:

Accepted Answer

A)  value used to calculate property taxes.
B)  estimated current market value.
C)  the price you paid to purchase the home.
D)  amount of money a buyer has offered to purchase the home.
E)  cost remaining after the down payment.

Question 12

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.

Question 13

A possible disadvantage of FHA and VA mortgages can be:

Accepted Answer

A)  higher debt ratios for buyers.
B)  a longer processing time.
C)  loans may be assumable.
D)  the monthly payments can be higher than those of other mortgages.
E)  the high down payment requirements.

Question 14

Paula has completed a mortgage application and provided evidence of employment,income,and existing debt to the potential lending institution.Although Paula has not even begun the process of looking at possible homes to buy,she is eagerly awaiting news from the lender as to whether she has been approved for a mortgage.In what stage of the application process is she?

Accepted Answer

A)  appraisal
B)  prequalification
C)  assessment
D)  amortization
E)  home inspection

Question 15

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 16

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

Question 17

A short-term mortgage with a very large final payment is called a ____________ mortgage.

Accepted Answer

A)  balloon
B)  graduated-payment
C)  growing-equity
D)  shared-appreciation
E)  negative-amortization

Question 18

Home improvements may contribute more to the value of the home than the cost of the renovations.

Accepted Answer

A) True 
 B)False

Question 19

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

Accepted Answer

A)  A condominium
B)  A duplex
C)  A cooperative
D)  A prefabricated home
E)  A mobile home

Question 20

The most common service provided by a real estate agent when selling your home is:

Accepted Answer

A)  providing legal advice.
B)  qualifying buyers for a mortgage.
C)  screening potential buyers.
D)  making needed repairs.
E)  attend home inspection.

Exam 9: The Housing Decision: Factors and Finances

A short-term mortgage with a very large final payment is called a ____________ mortgage.

Correct Answer
verified

Correct Answer
verified

Home improvements may contribute more to the value of the home than the cost of the renovations.

Correct Answer
verified

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

Correct Answer
verified

The most common service provided by a real estate agent when selling your home is:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

An appraisal refers to the price for which a home has been sold.

Correct Answer
verified

A possible disadvantage of FHA and VA mortgages can be:

Correct Answer
verified

Which one of these situations creates negative amortization?

Correct Answer
verified

Correct Answer
verified

Which one of the following is an advantage of renting?

Correct Answer
verified

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 Answer
verified

The appraised value of your home is the:

Correct Answer
verified

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

Correct Answer
verified

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

Correct Answer
verified

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

A cost associated with home buying would be:

Correct Answer
verified

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an) :

Correct Answer
verified

The purpose of a security deposit is to:

Correct Answer
verified

Exam 9: The Housing Decision: Factors and Finances

A short-term mortgage with a very large final payment is called a ____________ mortgage.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Home improvements may contribute more to the value of the home than the cost of the renovations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The most common service provided by a real estate agent when selling your home is:

Correct AnswerverifiedShow Answer

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

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

An appraisal refers to the price for which a home has been sold.

Correct AnswerverifiedShow Answer

A possible disadvantage of FHA and VA mortgages can be:

Correct AnswerverifiedShow Answer

Which one of these situations creates negative amortization?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which one of the following is an advantage of renting?

Correct AnswerverifiedShow 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 appraised value of your home is the:

Correct AnswerverifiedShow Answer

James Monroe is a member of a nonprofit organization that allows him to rent a living unit in a building.What type of housing is James most likely living in?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

A cost associated with home buying would be:

Correct AnswerverifiedShow Answer

Brett has hired a professional to assess the soundness of the roof,foundation,and building materials of a potential home he is considering.The professional will also be checking other aspects of the home including the plumbing,heating,and cooling systems.Brett is paying for a(an) :

Correct AnswerverifiedShow Answer

The purpose of a security deposit is to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified