Pers Finance 9

TF Most people select a place of residence based on available financial resources, needs, and lifestyle. True
TF Ease of mobility is an advantage of renting. True
TF A lease protects the rights of both the tenant and the landlord. True
TF A security deposit is a fee charged to help you find an apartment or house to rent. False
TF Condominiums involve the purchase of an individual living unit rather than an entire building. True
TF Cooperative housing involves the renting of a living unit by the people involved in ownership of the building on a nonprofit basis. True
TF Many people believe that location is the most important factor to consider when selecting a home. True
TF Current interest rates can affect the price of a home. True
TF Negotiating a purchase price for a home usually involves an offer and counteroffers. True
TF The amount of the down payment will affect the amount of mortgage a person can afford. True
TF Prepaid interest may be a part of a mortgage agreement. True
TF An FHA-insured mortgage has less risk than a conventional mortgage for the financial institution True
TF Adjustable rate mortgages with a payment cap can result in a situation of negative amortization. True
TF A buy down results in reduced mortgage payments during the first few years of the loan as a result of an interest rate subsidy from a builder or real estate developer True
TF A balloon mortgage can help a homebuyer when interest rates are high but are expected to come down in the near future. True
TF An escrow account is designed to reduce the cost of a mortgage False
TF An appraisal refers to the price for which a home has been sold. False
TF Home improvements may contribute more to the value of the home than the cost of the renovations. True
Renting is more advantageous than buying a home for lower short-term living costs.
A common opportunity cost associated with renting is interest lost on the security deposit.
A cost associated with home buying would be Property Taxes
Renting would be most appropriate for people who have limited funds currently available
The main financial benefit of renting is lower initial costs.
What does it mean to sublet an apartment? to obtain another tenant to complete a lease period
The purpose of a security deposit is to Pay for potential damages
A condominium involves ownership of an individual living unit
A cooperative housing arrangement involves an NPO
Otto Putman rents a living unit as a result of his membership in a nonprofit housing organization. What name is commonly used for this type of housing? cooperative housing
A common financial benefit of home ownership is increased property value
A common financial risk of home ownership is that property value may decrease
Which of the following would increase the amount that a person could afford to spend on a home? increased family income
The most commonly considered factor when selecting a home is the location
As Wally Quinten conducts an investigation of property value factors, most real estate experts tell him that ____________ most influences the housing values in an area. quality of schools
The purpose of zoning laws is to restrict property use
A real estate agent can best assist a homebuyer by assisting in getting a mortgage
The purpose of a counteroffer is to negotiate the purchase price
Earnest money has the purpose of serving as good faith by a homebuyer.
The amount of mortgage a person is eligible for would be increased by lower interest rates
What is prepaid interest charged by a mortgage company? points
Which of the following is an example of a conventional mortgage? a fixed rate mortgage
A possible disadvantage of FHA and VA mortgages can be a longer processing time
Negative amortization is the result of a higher amount owed on the mortgage
A newly married couple is having trouble affording a home. What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer? buy down
Refinancing of a mortgage is recommended when interest rates fall
Which of the following is an example of a closing cost? title insurance
The purpose of title insurance is to guarantee the boundaries of the property
Which document is used to transfer ownership of property from one party to another? deed
Which of the following expenses is paid from an escrow account? property insurance
The purpose of an appraisal is to estimate the current value of a home
If you sell your home without the use of a real estate agent, you should still make use of a lawyer.

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