What Should A Home Buyer Consider When Evaluating A House

Question: e)$167,597.77

Answer: 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? a) $324,000.00b)$200,100.75c)$510,015.00d)$150,000e)$167,597.77

Question: D. Traditional financial guidelines suggest that your home should cost about five times your annual income.

Answer: Which of the following is NOT correct? A.Renting is usually less expensive in the short run.B.Home ownership usually has long-term financial advantages.C.Lifestyle and financial factors should be analyzed to determine if you should rent or buy.D. Traditional financial guidelines suggest that your home should cost about five times your annual income. E.Renting offers mobility.

Question: E.Subletting.

Answer: The opportunity to have another person take over rent payments and live in the rental unit is called a A.Lease.B.Lessee.C.Lessor.D.Rental agreement.E.Subletting.

Question: A.Lease.

Answer: A legal document that includes information about the due date of monthly rent is called a A.Lease. B.Lessee.C.Lessor.D.Rental statement.E.Sublease.

Question: C.Lessor.

Answer: The owner/landlord is known as the A.Lease.B.Lessee.C.Lessor. D.Renter.E.Sublease.

Question: B.Lessee.

Answer: The tenant is the A.Lease. B.Lessee. C.Lessor.D.Owner.E.Sublease.

Question: A.Lease

Answer: Which of the following provides the tenant protection from rent increases? A.Lease B.LesseeC.LessorD.Rental statementE.Sublease

Question: C.An advantage is that the down payment required is less than the security deposit for a rental.

Answer: 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? A.An advantage is that Donald can deduct mortgage interest and real estate taxes.B.A disadvantage is that Donald is responsible for maintenance and costs of repairs and home improvements.C.An advantage is that the down payment required is less than the security deposit for a rental. D.A disadvantage is that real estate taxes are a major expense for home owners.E.An advantage is that Donald can paint his house bright purple with green trim to match his college's colors.

Question: B.Cooperative housing

Answer: Which of the following is a form of housing in which the units are owned by a nonprofit organization? A.CondominiumB.Cooperative housing C.Manufactured homeD.Single-family dwellingE.Townhouse

Question: C.Manufactured home.

Answer: Diane purchased her house and had it assembled before it was moved to her lot. She purchased a A.Condominium.B.Cooperative housing.C.Manufactured home. D.Single-family dwelling.E.Townhouse.

Question: E.Townhouse.

Answer: Elaine purchased her living unit in a building with five other separate units. She purchased a A.Condominium.B.Duplex.C.Manufactured home.D.Single-family dwelling.E.Townhouse.

Question: E.Contractor's property tax payments during construction.

Answer: Paul and Lora built their home. When they researched contractors, they paid attention to all of the following except A.Contractor's reputation and experience.B.Contractor's relationship with suppliers and subcontractors.C.Payment arrangements during construction.D.Time and payment schedules.E.Contractor's property tax payments during construction.

Question: A.Down payment.

Answer: Frank and Diane want to buy a house. Which of the following do they need before they purchase a house? A.Down payment. B.Home owner's insurance.C.Mortgage interest.D.Mortgage principal.E.Real estate taxes.

Question: E.All of these should be evaluated.

Answer: What should a home buyer consider when evaluating a house? A.Zoning laws.B.Location of businesses and future construction projects.C.School system.D.Property values of the community.E.All of these should be evaluated.

Question: E.Home appraisal.

Answer: 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 A.Negotiating a settlement price.B.Receiving an offer from a buyer.C.Representing Ingrid at the closing.D.Showing Ingrid's home to potential buyers.E.Home appraisal.

Question: B.Set up a home inspection.

Answer: Jim wants to make an offer to buy an older house. At this point, he should A.Move into the house.B.Set up a home inspection. C.Contact the seller to purchase his lawn tools.D.Close the purchase transaction.E.Sign his mortgage papers.

Question: D.The seller may reject the offer and choose to provide a counteroffer.

Answer: Kelly selected a home and and submitted an offer to the seller A.The seller must accept her offer.B.Her offer must have been for the asking price.C.The seller's price is affected by Kelly's need to buy.D.The seller may reject the offer and choose to provide a counteroffer. E.Kelly will receive earnest money when she presents the offer.

Question: B.contingency clause

Answer: 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. A.appraisalB.contingency clause C.dual agentD.earnest moneyE.purchase agreement

Question: A.Appraisal.

Answer: When Nancy buys her house, the mortgage company will probably conduct a(n) A.Appraisal. B.Contingency clause.C.Dual agent.D.Earnest money.E.Purchase agreement.

Question: C.Dual agent.

Answer: 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(n) A.Appraisal.B.Contingency clause.C.Dual agent. D.Earnest money.E.Purchase agreement.

Question: D.Must be terminated automatically when the home owner's equity reaches 22% of the property value at the time the loan was initiated.

Answer: Private mortgage insurance A.Cannot be avoided.B.Is part of all mortgages.C.Is usually required if the down payment is less than 25%.D.Must be terminated automatically when the home owner's equity reaches 22% of the property value at the time the loan was initiated. E.Protects the buyer from financial loss if the value of the home increases.

Question: A.Expected maintenance costs.

Answer: Quinn applied for a loan. He provided information about his finances and the home he plans to purchase. Results of the mortgage calculation included all of the following except A.Expected maintenance costs. B.The home purchase price he can afford.C.The monthly mortgage payment he can afford.D.The mortgage amount he can afford.E.All of these are correct

Question: E.Points.

Answer: Rebecca paid extra money to reduce her mortgage interest rate. That extra money is called: A.Amortization.B.Escrow.C.Lock.D.PMI.E.Points.

Question: A.amortization

Answer: Ricky has a conventional mortgage. He can monitor his interest and principal payments using _____ information. A.amortization B.escrowC.lockD.PMIE.points

Question: C.lock

Answer: 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 ____________ on the interest rate. A.amortizationB.escrowC.lock D.PMIE.points

Question: D.PMI.

Answer: Trenton wants to buy a house but can provide only a 10% down payment. He probably will be required to have A.Amortization.B.Escrow.C.Lock.D.PMI. E.Points.

Question: E.VA loan.

Answer: As a result of being an armed services veteran, Dan should be eligible for a A.ARM.B.FHA loan.C.Negative amortization.D.Payment cap.E.VA loan.

Question: B.FHA loan.

Answer: 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 A.ARM.B.FHA loan. C.Negative amortization.D.Payment cap.E.VA loan.

Question: D.Payment cap.

Answer: Yvette has a flexible-rate mortgage that has a maximum monthly increase. This feature is called a(n) A.ARM.B.FHA loan.C.Negative amortization.D.Payment cap. E.VA loan.

Question: a) interest-only mortgage

Answer: 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 a) interest-only mortgageb) buy-downc) FHA loan d) home equity mortgagee) ARM

Question: C.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.

Answer: A reverse mortgage A.Is the same thing as a second mortgage.B.Offers a home buyer a home loan with a 30-year payment period.C.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. D.Two of these are correct.E.All of these are correct.

Question: B.Pay all closing costs, settle last-minute items, and sign documents.

Answer: During the closing for a home purchase, you will normally do which of the following? A.Order an appraisal.B.Pay all closing costs, settle last-minute items, and sign documents. C.Schedule an inspection of the condition of the home.D.Sign documents and pay half of the settlement costs.E.Review zoning laws for the municipality where the home is located.

Question: A.Deed

Answer: Which of the following is the document that transfers ownership of property from one party to another? A.Deed B.EscrowC.MortgageD.PMIE.Points

Question: B.Escrow

Answer: Which of the following is an account used to pay property taxes and home insurance? A.DeedB.Escrow C.MortgageD.PMIE.Points

Question: C.His original cost.

Answer: Lonnie wanted to sell his house but didn't know what price to ask. He should consider all of the following except A.Current mortgage rates.B.Demand in the housing market.C.His original cost. D.Recent selling prices of comparable homes in the area.E.The appraised value of his home.

Question: B.A lawyer or title company to assist with the contract, closing, and other legal matters.

Answer: If you are selling your house by owner, you should still enlist the assistance of A.A real estate agent to help with the closing.B.A lawyer or title company to assist with the contract, closing, and other legal matters. C.Your brother-in-law to aid with legal issues of the sale.D.Two of these are correct.E.All of these are correct.

Question: E.They require that you conduct your own showings.

Answer: Which of the following is NOT correct regarding real estate agents? A.They can provide advice on features of your home to highlight.B.They handle financial aspects of the sale.C.They may include a presentation of your home on various websites.D.They may screen potential buyers to determine if they will qualify for a mortgage for your home.E.They require that you conduct your own showings.

Question: a) $17,900

Answer: Given the info here what is the annual cost of owning? Home value: $3000Annual property taxes: $4,800Annual homeowner's insurance: $1,200Estimated maintenance and repairs: 1% of home value Growth in equity: $3,000Tax savings: $2,800Estimate annual appreciation: 1.5% of home value a) $17,900 b) $28,200c) $38,500d) $300,000e) $338,500

Question: A.$117,000.

Answer: 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 A.$117,000. B.$122,000.C.$140,000.D.$150,000.E.$162,000.

Question: B.$625.00

Answer: If you have a $150,000 30-year 5% mortgage, how much of your first monthly payment of $805.50 would go toward interest? A.$180.50B.$625.00 C.$665.28D.$805.50E.$7,500.00