FIN 201: Reading Assignment

Select all that apply Which of the following are the common terms (years) of home mortgages?

- 10 - 15 - 20 - 30

Select all that apply In the context of the home inspection as part of the home-buying process, identify elements of interior design.

- Adequate laundry area - Ventilation for cooking -

Select all that apply

- Heat - Electricity - Cable television

Select all that apply Which of the following are advantages of buying housing?

- Many remodeling or customization possibilities -

True or False: Homeowners without children do not need to be concerned with school system in which their home is located.

False

FHA/VA fixed-rate mortgage typically have ______ (low/high) down payment requirements.

low

An adjustable-rate mortgage usually has a rate cap and a ______ cap.

payment

Previously owned houses, new houses and custom-built houses are often referred to as:

single-family dwellings

Select all that apply Which of the following factors have an impact on the amount you can spend to acquire a home of your own?

- Your income (salary, wages, investment income, etc.) - The amount of the down payment you can make - Your current living expenses

Select all that apply The benefits of a conventional 15-year or 20-year mortgage usually include:

- a lower rate than a 30-year mortgage - a quicker pay-off of the loan than a 30-year amortization -

Select all that apply Common sources of down payment funds to purchase a home include:

- assistance from relatives - the sale of investments -

Select all that apply When thinking of buying your first home it is important to (Check all that apply)

- consider a handy-man's special at a lower price -

Select all that apply Although the interest-only mortgage has lower interest payments, it does not allow the borrower to (select all the options that apply):

- decrease the amount that is owed. -

Select all that apply Interior construction can include all of the following:

- ease and operation of windows -

Select all that apply Generally speaking, the ______ the credit score the ______ the mortgage rate.

- higher, lower - lower, higher

Select all that apply The expenses covered by a condominium monthly fee include:

- insurance for common areas - maintenance and repairs - improvements

Select all that apply The benefits of a FHA/VA fixed-rate mortgage include:

- low down payment - may be assumable with no prepayment penalties

Payments on a mortgage are usually made over a time period ranging from 10 to ______ years.

30

Which of the following is NOT included among closing or settlement costs? One of these is incurred at the beginning of the process and not at the closing.

Credit report

True or False: When renting, it is not recommended that one should get insurance coverage on personal property.

False

How could the tax benefit and risk of a home equity loan best be described?

Interest is tax deductible, but default could mean foreclosure.

Which of the following is not a service provided by a real estate agent?

Obtaining financing for you

______ mortgage insurance is usually required if the down payment is less than 20 percent.

Private

Which of the following is not something the government agency does through government-guaranteed financing programs?

Provide the mortgage money

Which of the following is not part of the interior construction that is evaluated during a home inspection?

Size and arrangement of rooms

During which step of the mortgage loan application process does the lender obtain a credit report and verify your application and financial status?

Step 2

Educators recommend that schools be evaluated based on which of the following?

Student achievement level

Which of the following best describes the rights of residents of cooperative housing?

The right to occupy the unit for as long as stock is owned

Which of the following best describes the role of a home inspector?

To review the interior and exterior construction, facilities, and design of a potential home purchase

True or False: A security deposit covers the cost of damages that may be done to a rental unit.

True

True or False: Current mortgage interest rates, your income, and funds available to make monthly payments can impact the amount you can spend on a home.

True

True or False: Location is considered the most important factor when buying a home.

True

True or False: Negotiating the purchase price for a home may involve an offer and several counteroffers.

True

When it comes to the size of manufactured homes, which one of the following is true? - Typically these homes are smaller than 1,000 square feet - Most are much smaller than 800 square feet - Most are around 1,300 square feet - Most are between 1000 and 1500 square feet

Typically these homes are smaller than 1,000 square feet

The common areas of condominiums are not owned by the condo owner but by the condominium ______.

association

A drawback of an interest-only mortgage is that it does not enable the borrower to build ______ unless the home value increases.

equity

Factors such as the material quality and condition of the building, the condition of the foundation, roof and gutters, and the type of chimney are part of the:

exterior construction

The benefits of an adjustable rate mortgage include all of the following except:

fixed rates on loans.

Potential home owners without children should evaluate school systems of the municipalities where they might live because:

good schools translate to rising property values

Tenants are protected from a rent _____ during the term of the lease unless the lease contains a provision allowing it.

increases

A trained home ______ reviews the interior and exterior construction, facilities, and design of a potential home purchase.

inspector

Conventional 30-year mortgages provide certainty regarding principal and ______ payments.

interest

Factors such as the size and arrangement of rooms, layout of kitchen, and the location of bedrooms, closets, and storage space should be considered when inspecting the ______ of a home.

interior design

Your ______, needs, desires, and attitudes are reflected in your choice of a home.

lifestyle

The most important factor when buying a home is said to be the home's ______.

location

One way that an interest-only mortgage benefits the borrower is by:

making the loan more easily affordable.

Renters have a financial disadvantage because they cannot take tax deductions for ______ interest.

mortgage

One way that an interest-only mortgage benefits the borrower is by:

offering lower payments.

Tenants are often subjected to restrictions regarding ______ and remodeling.

pets

It is a good idea for home buyers to go first to a mortgage company and _____.

pre-qualify

A ______ deposit is usually one month's rent that is held by the landlord to cover the cost of any damages to the rented property.

security

While residents in cooperative housing do not own the units, they have the legal right to occupy their unit as long as they own ______ in the cooperative association.

stock

Despite its fixed payments, some borrowers will select an adjustable rate mortgage over a conventional mortgage because:

the adjustable rate mortgage has lower initial payments

True or False: Home equity loan interest is only tax deductible as long as the proceeds are spent on education with the risk being that a default on the equity loan could mean foreclosure.

False

The tenant is protected from rental increases during the lease term unless the lease contains a(n) ______ allowing for increases.

provision

Reverse mortgages provide homeowners who are _____ or older with tax-free income in the form of a loan that is paid back when the home is old or the homeowner dies.

62

True or False: One of the reasons why renting offers fewer financial benefits than home ownership is that rent is not tax deductible while the interest on mortgage payments is.

True

True or False: Some of the factors to consider when determining a price for a home include the owner's need to sell, the time the home has been on the market, and the features and condition of the home.

True

True or False: The importance of preparing your home for sale is that it can make for a fast and financially favorable sale.

True

True or False: You should consider refinancing costs in relation to the savings gained with a lower monthly payment before moving forward with refinancing.

True

Select all that apply Which of the following are disadvantages of buying housing?

- Significant financial commitment - Limited mobility (difficult to move)

Traditional guidelines suggest spending no more than ___ times your annual income on housing.

2 1/2

Select all that apply In the context of the home inspection as part of the home-buying process, identify elements of exterior facilities.

- Appropriate drainage system - Condition of patio or porch

Select all that apply Which of the following are the advantages associated with renting an apartment?

- Easy to move (mobility) - Less maintenance than owning - Minimal financial commitment

Select all that apply Which of the following are the main services offered by a real estate agent?

- Helping you negotiate a price for a home -

Select all that apply What are some of the disadvantages of home ownership?

- Higher living expenses than renting - Limited mobility when compared to renting - Significant financial commitment

Select all that apply The financial variables to consider when determining an appropriate amount for your housing expenses include which of the following?

- Income - home cost - take-home pay

Select all that apply The advantages of owning a manufactured home (mobile home) include which of the following?

- Less expensive than other options - Offer features such as fully equipped kitchen and fireplace

Click and drag on elements in order Place the steps of the mortgage process in the sequence in which they occur.

1. Complete the mortgage application and present evidence of income, etc. 2. Lender gets credit report, confirms financial aspects 3. Mortgage is approved or denied

Which of the following is NOT true? - The initial rate offered by ARMS is usually higher than conventional mortgages. - A payment cap could cause negative amortization. - The initial rate offered on ARMS is usually lower than those on conventional mortgages. - A rate cap restricts how much a rate can increase or decrease.

The initial rate offered by ARMS is usually higher than conventional mortgages.

Select all that apply Which of the following can affect mortgage affordability?

- The amount of income you earn - The length of the loan - Your down payment - Mortgage rates

Conventional 15- or 20-year mortgages have faster ______ buildup, which is a key advantage over a 30-year mortgage.

equity

Buying a ______ is the most expensive decision that most people will ever make.

home

Select all that apply Which of the following home improvements are the most desirable (i.e., they will have the greatest positive impact on the asking price)?

- New energy-efficient features - Remodeled kitchen -

Select all that apply Which of the following are the important considerations when evaluating a local school system?

- Program quality - Percentage of students who go to college - Achievement level of students

Select all that apply The advantages of owning a home include:

- personalized living location - stability of residence - tax benefits

Select all that apply The amount of money offered for a home depends on (select all that apply):

- the time the home has been on the market. - features of the home. - recent selling prices of homes in the area.

Select all that apply When purchasing a home, the buyer (not the seller) can expect to pay closing costs such as:

- title search fee. - settlement fee. -

Select all that apply When seeking a real estate agent, it is important to consider the agent's (select the options that may apply):

- willingness to market your property. -

An important security measure to take when selling your own home is to show the home when ______ or more adults are at home.

2

True or False: Making needed repairs, painting the interior and exterior of the home, and cleaning all rooms are strategies that can lead to a fast and financially favorable sale.

True

For security when selling your home by owner, you should show your home _____ and only when two or more adults are home.

by appointment only

You can sell your home on your own but you must be prepared to:

invest your time and effort.

One of the most important services that real estate agents provide is that they:

market your house on various websites.

Which of the following home improvements would not have the most favorable impact on asking price?

New hot tub not preferred by the potential buyers