Question 1

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) A) and C)
G) A) and B)

Question 2

A condominium involves:

Accepted Answer

A)  renting a mobile home.
B)  buying stock in a nonprofit organization.
C)  ownership of an individual housing unit in a building.
D)  government-subsidized housing.
E)  renting a house with the option to buy.F) A) and E)
G) C) and D)

Question 3

Prepaid interest may be a part of a mortgage agreement.

Accepted Answer

A) True 
 B)False

Question 4

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 homeF) A) and E)
G) B) and E)

Question 5

A conventional mortgage usually involves:

Accepted Answer

A)  a variable interest rate.
B)  a government guarantee.
C)  a balloon payment.
D)  equal payments.
E)  a payment cap.F) C) and D)
G) B) and E)

Question 6

If you sell your home without a real estate agent,you should still employ the services of a _____ to assist you with the contract and the closing.

Accepted Answer

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

Question 7

A _________ is a building that contains exactly two separate homes.

Accepted Answer

A)  mobile home
B)  duplex
C)  condominium
D)  prefabricated home
E)  cooperativeF) B) and D)
G) C) and D)

Question 8

The purpose of a counteroffer is to:

Accepted Answer

A)  negotiate the purchase price.
B)  reduce mortgage payments.
C)  lower real estate property taxes.
D)  avoid paying points at closing.
E)  avoid paying the real estate agent's commission.F) A) and C)
G) All of the above

Question 9

Which document does the seller use to guarantee the title is good?

Accepted Answer

A)  Title
B)  Escrow account
C)  Settlement statement
D)  Appraisal
E)  Warranty deedF) D) and E)
G) C) and E)

Question 10

What is the purpose of an escrow account and what costs are typically included?

Accepted Answer

An escrow account protects the lender fr...

Question 11

Money that is usually deposited with the lending institution for the payment of property taxes and homeowner's insurance is called:

Accepted Answer

A)  points.
B)  an escrow account.
C)  a rate cap.
D)  closing costs.
E)  a buy-down.F) C) and D)
G) A) and E)

Question 12

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 finished basement
E)  An exercise roomF) C) and E)
G) All of the above

Question 13

Which type of repair problem is more likely to be covered by a new homeowner service contract?

Accepted Answer

A)  Structural damage
B)  Roof damage from a hurricane
C)  Paint for worn exterior
D)  Heating and cooling system failure
E)  Remodeling the kitchenF) A) and B)
G) B) and C)

Question 14

Selecting a place of residence is reflected by your:

Accepted Answer

A)  lifestyle.
B)  gender.
C)  favorite restaurant.
D)  credit score.
E)  number of years employed.F) A) and B)
G) A) and C)

Question 15

Which of the following would increase the amount that a person could afford to spend on a home?

Accepted Answer

A)  Increase in family income
B)  Increase in insurance payments
C)  Decrease in initial maintenance and repairs
D)  Increase in utility bills
E)  Increase in monthly living expensesF) C) and D)
G) B) and E)

Question 16

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) None of the above
G) A) and B)

Question 17

A payment cap on an adjustable-rate mortgage can result in negative amortization when:

Accepted Answer

A)  interest rates decrease but the amount of the monthly payment does not.
B)  the amount of the monthly payment increases and interest rates do not.
C)  the amount of the monthly payment decreases and interest rates do not.
D)  interest rates rise but the amount of the monthly payment does not.
E)  the loan stretches out to 40 years.F) A) and B)
G) B) and E)

Question 18

Which of the following can affect the price of a home?

Accepted Answer

A)  Cost of the home inspection
B)  Number of realtors in the area
C)  Cost of the appraisal
D)  Current interest rates
E)  Number of loan officers in the areaF) A) and C)
G) C) and D)

Question 19

The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by which the interest rate can vary.

Accepted Answer

A) True 
 B)False

Question 20

Legislation that requires that loan applicants be given certain information,including an estimate of the closing costs,before the actual 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.F) A) and E)
G) A) and C)

Exam 9: The Housing Decision: Factors and Finances

A _________ is a building that contains exactly two separate homes.

Correct AnswerverifiedShow Answer

The purpose of a counteroffer is to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If you sell your home without a real estate agent,you should still employ the services of a _____ to assist you with the contract and the closing.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following can affect the price of a home?

Correct AnswerverifiedShow Answer

The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by which the interest rate can vary.

Correct AnswerverifiedShow Answer

A condominium involves:

Correct AnswerverifiedShow Answer

A conventional mortgage usually involves:

Correct AnswerverifiedShow Answer

Which document does the seller use to guarantee the title is good?

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

Money that is usually deposited with the lending institution for the payment of property taxes and homeowner's insurance is called:

Correct AnswerverifiedShow Answer

What is the purpose of an escrow account and what costs are typically included?

Correct AnswerverifiedAn escrow account protects the lender fr...View AnswerShow 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

A payment cap on an adjustable-rate mortgage can result in negative amortization when:

Correct AnswerverifiedShow Answer

Selecting a place of residence is reflected by your:

Correct AnswerverifiedShow Answer

Prepaid interest may be a part of a mortgage agreement.

Correct AnswerverifiedShow Answer

Which type of repair problem is more likely to be covered by a new homeowner service contract?

Correct AnswerverifiedShow Answer

Which of the following would increase the amount that a person could afford to spend on a home?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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An escrow account protects the lender fr...
View Answer

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