Finance Quiz #7

Marcus can afford a monthly mortgage payment of $900. If he is eligible for a 30-year, 5% mortgage (where the mortgage factor is 5.37), how much of a mortgage loan can he afford? $167,597.77
Which of the following is NOT correct? Traditional financial guidelines suggest that your home should cost about five times your annual income.
The opportunity to have another person take over rent payments and live in the rental unit is called (a) Subletting.
A legal document that includes information about the due date of monthly rent is called a Lease.
The owner/landlord is known as the Lessor.
The tenant is the Lessee.
Which of the following provides the tenant protection from rent increases? Lease
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? An advantage is that the down payment required is less than the security deposit for a rental.
Which of the following is a form of housing in which the units are owned by a nonprofit organization? Cooperative housing
Diane purchased her house and had it assembled before it was moved to her lot. She purchased a Manufactured home.
Elaine purchased her living unit in a building with five other separate units. She purchased a Townhouse.
Paul and Lora built their home. When they researched contractors, they considered all of the following except Contractor’s property tax payments during construction.
Frank and Diane want to buy a house. Which of the following do they need before they purchase a house? Down payment.
What should a home buyer consider when evaluating a house? A) Property values of the community B) Location of buisnesses and future construction projects C) school system D) Zoning Laws E) All of these should be evaluated. All of these should be evaluated.
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 Home appraisal.
Jim wants to make an offer to buy an older house. At this point, he should Set up a home inspection.
Kelly selected a home and submitted an offer to the seller. The seller may reject the offer and choose to provide a counteroffer.
Madeline wants to purchase a larger house. However, she has not yet sold her current home. She may want to include a(n) ________ in her offer. contingency clause
When Nancy buys her house, the mortgage company will usually conduct An appraisal.
Opal is a real estate agent who represents the buyer as well as the seller. In some states, the buyers are required to sign a disclosure acknowledging that they are aware that Opal is working as A dual agent.
Private mortgage insurance Must be terminated automatically when the homeowner’s equity reaches 22% of the property value at the time the mortgage was executed.
Quinn applied for a loan. He provided information about his finances and the home he plans to purchase. Results of the affordability mortgage calculation included all of the following except Expected maintenance costs.
Rebecca paid extra money to reduce her mortgage interest rate. That extra money is called: Points.
Ricky has a conventional mortgage. He can monitor the reduction of his loan balance through his payments by using ________ information. amortization
When Sam applied for a loan, he was assured that his rate would not change if he closed within 30 to 90 days. Sam had a(n) ________ on the interest rate. lock
Trenton wants to buy a house but can provide only a 10% down payment. He probably will be required to have PMI payments.
As a result of being an armed services veteran, Dan should be eligible for a(n) VA loan.
Paul is looking for a low interest, low down payment loan for his first home, but he is not a veteran. He might be eligible for a(n) FHA loan.
Yvette has a flexible-rate mortgage that limits the amount to which her monthly payments can rise. This feature is called a(n) Payment cap.
If you do not pay back any of the loan amount for a portion of the loan period but are not defaulting in the loan, you have a(n) Interest-only mortgage.
A reverse mortgage Provides older home owners with tax-free income in the form of a loan that is repaid when the home is sold or the home owner dies.
During the closing for a home purchase, you will normally do which of the following? Pay all closing costs, settle last-minute details, and sign documents
Which of the following is the document that transfers ownership of property from one party to another? Deed
Which of the following is an account used to pay property taxes and homeowner’s insurance? Escrow
Lonnie wanted to sell his house but didn’t know what price to ask. He should consider all of the following except His original cost.
If you are selling your house by owner, you should still enlist the assistance of A lawyer or title company to assist with the contract, closing, and other legal matters.
Which of the following is NOT correct regarding real estate agents? They require that you conduct your own showings.
Given the information here, what is the annual cost of owning?• Home value $ 300,000 • Annual mortgage payments $ 19,200 • Annual property taxes $ 4,800 • Annual homeowner’s insurance $ 1,200 • Estimated maintenance and repairs 1 % of home value• Growth in equity $ 3,000 • Tax savings (mortgage interest and property tax) $ 2,800 • Estimate annual appreciation 1.5 % of home value $17,900
Carrie bought a house five years ago for $150,000. At that time she borrowed $140,000 from her bank. The house is now worth $162,000. Her PMI will automatically be dropped when her mortgage balance drops to $117,000.
If you have a $150,000 30-year 5% mortgage, how much of your first monthly payment of $805.50 would go toward interest? $625.00

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