EverFi Renting Vs Owning Quiz Answers

The biggest factor in determining the price of a mortgage is:The total cost of the home.

The down payment.

The interest rate.

The lender.

Answer:  The total cost of the home.

All of the following components are commonly found in rental housing agreements EXCEPT:Whether the renter can have pets in the house

How much the renter will pay

What type of renter’s insurance the renter must buy

Which repair types the renter will be responsible for

Answer:  What type of renter’s insurance the renter must buy

What is a mortgage?A type of rent used to pay for housing

A type of loan used to buy property

A measure of the value of a home

A measure of your credit rating

Answer: A type of loan used to buy property

Which best describes the benefits of renting a home?Renting can cost more upfront.

Renting is less flexible than owning a home.

Renting has a lease that cost money to break

Answer:  None of the above

Jim wants to buy a car, but he’ll probably only need it for a couple of years. He has a short commute to work, so he won’t be putting many miles on his vehicle. What’s the best transportation option for Jim?Use his savings to buy the car in full

Buy the car using an auto loan

Lease the car

Take public transportation

Answer:  Lease the car

Someone may choose to own a car instead of leasing because:The car can be resold later to make some money back.

The car can be resold later for a higher price.

The maintenance costs for a leased car are generally higher.

The insurance costs for a leased car are higher.

Answer: The car can be resold later to make some money back.

Which of the following will affect the size of your monthly mortgage payment?The size of your down payment

The length of your mortgage

The purchase price of your house

Answer:  All of the above

A typical housing lease may require a tenant to:Repair certain types of damage to the property

Purchase renter’s insurance for the property

Avoid participating in illegal activity on the property

Answer:  All of the above

Typically homes ___________ over time and cars ______________ over time.

Answer:  appreciate ; depreciate

A _________ is generally considered an appreciating asset because it may _________ in value over time.

Answer:  house ; increase

Renting provides _________ flexibility but can lead to _________ costs in the long-term.

Answer:  greater ; higher

Which of the following statements is correct?Cars typically lose the most value in the first year after purchase.

Houses will always appreciate in value over the long-term.

Both

Neither

Answer:  Cars typically lose the most value in the first year after purchase.

Which combination of factors would result in the lowest monthly mortgage payment?Big down payment, a longer term loan, and low interest rate

Answer:  Big down payment, a shorter term loan, and high interest rate

Small down payment, a shorter term loan, and high interest rate

Small down payment, a shorter term loan, and small interest rate

Big down payment, a longer term loan, and low interest rate

Depreciating assets:

Answer:  Become less valuable over time

Which of the following statements about renting & owning is CORRECT?

Answer:  Both the renter and the owner share responsibility and control over the property.

John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he really likes, but he can only afford about 60% of the monthly rent. What is the best housing option for John?

Answer:  Rent it with a roomate

Owning provides _________ flexibility but can lead to _________ costs in the long-term.

Answer:  less ; lower

Which of the following is NOT a cost typically associated with owning a car?

Answer:  Wear and Tear fees

John would like to move from the city into the suburbs and has been saving up a large down payment for a home. Which is the most cost effective way for John to buy a house in the suburbs?

Finish the term of his apartment lease in the city and find a new home to purchase simultaneously.

Move to the suburbs and rent a house for one year before purchasing a home.

Break his lease once he has bought the perfect home.

Break his lease and move to the suburbs immediately without identifying a home to buy.

Answer:  Finish the term of his apartment lease in the city and find a new home to purchase simultaneously.

What is a lease?

Answer:  A contract outlining the terms under which a landlord agrees to rent property to a tenant.

Jim is in the market for a car that will last for the next 10 years and has saved up some money for the purpose of a car. What’s the best transportation option for Jim?

Answer:  utilizing his saving as a down lay,net and buying the car using an auto loan

Jim wants to buy a car, but he’ll probably only need it for a couple of years. He has a short commute to work, so he won’t be putting many miles on his vehicle. What’s the best transportation option for Jim?

Answer:  Lease the car

John would like to move from the city into the suburbs and has been saving up a large down payment for a home. Which is the most cost effective way for John to buy a house in the suburbs?

Answer:  Finish the term of his apartment lease in the city and find a new home to purchase simultaneously.

Depreciating assets:

Answer:  Become more valuable over time.

What is a lease?

Answer:  A contract outlining the terms under which a landlord agrees to rent property to a tenant.

Typically homes ___________ over time and cars ______________ over time.

Answer:  appreciate; depreciate

Which combination of factors would result in the lowest monthly mortgage payment?

Answer:  Small down payment, a shorter term loan, and small interest rate

The biggest factor in determining the price of a mortgage is:

Answer:  The total cost of the home.

Renting provides _________ flexibility but can lead to _________ costs in the long-term.

Answer:  greater; higher

Which best describes the benefits of renting a home?

Answer:  greater; higher