Finance Chapter 13 Buying a Home

A __ is a Formal document that expresses interest in entering into a real estate contract with someone else.

earnest money offer

A fund where money is held by your financial institution to pay amounts that will come due during the year.

escrow account

A lien is it right or privilege one person has to use the land of another person

false

Renting or owning real estate is a type of tax shelter.

false

The most common source of down payment money is a bank.

false

When a seller excepts an offer exactly as stated, this is called a counter offer.

false

A loan to purchase real estate is called a ___.

mortgage

The process of determining how much money you are qualified to borrow.

prequalify

Earnest money protects the ...

seller

A legal write-off that reduces tax liability

tax shelter

When you apply for a mortgage what will we checked?

Your references, your credit history, your income

Who conducts a title search and issues to report?

a title insurance company

The value given at by a real estate appraiser is called its __ value.

appraised

The __ value is used for purposes of computing property taxes owed against at home

assessed

___ Are the expenses incurred in transferring ownership from buyer to seller in a real estate transaction.

closing costs

Real estate agents earn __ for their work, which is a percentage of the home sale price

commission income

__ are conditions that limit a buyers liability in case one or more of them are not met.

contingencies

A __ loan is a mortgage agreement offered through a commercial bank or mortgage broker that does not have government backing.

conventional

A rejection of an original offer with a Listing of what terms would be acceptable is called a __.

counteroffer

A __ Is the legal document that transfers total of real property.

deed

What is equity? How does equity increase?

Equity is the difference between the market value of property and the amount owed on it. Appreciation is one way that the equity increases. Equity also increases as you make loan payments, which decreases your debt.

Real estate agents use comps to get a general idea of a property's ...

Estimated

Home ownership offers ...

Financial advantages, quality of life advantages, tax savings

A __ mortgage is one whereby the interest rate does not change during the term of the loan.

Fixed rate

To qualify for a conventional loan to purchase a home a borrower must ...

Have a good credit score

To finance your purchase of a house, you must ...

Have funds for the down payment, meet certain lending requirements, select the type of mortgage you want

A __ is a financial claim against property.

Lien

The __ is a real estate marketing service in which agents pool their home listings and agree to share commissions on the sales.

MLS

The __ value of a home is the highest price that the property will bring to the market.

Market

A __ the formal agreement to the terms of the buyers offer.

Sellers acceptance

What are some sources where you can get down payment money for a home?

Some sources for down payment money for a home include your savings, a monetary "gift" from your family, and your retirement account.

The cost of homeownership is lowered through ...

Tax deductions

What occurs at the closing?

The closing date is the official date when documents are signed, closing costs are paid, cash is disbursed to the seller, and the deed is recorded.

Real estate agents are commissions that are usually between ... percent of a home sale price.

6 and 8

What is the difference between a conventional and FHA loan?

A conventional loan is a mortgage agreement that does not have government backing and that is offered through a commercial bank or mortgage broker. It requires a 10 to 30 percent down payment. An FHA loan is a government-sponsored loan that carries mortgage insurance. It requires a down payment as little as 3.5 percent.

A __ mortgage is one where by the interest rate changes in response to the movement of interest rates in the economy.

Adjustable rate

What is an earnest money offer, and why is it important?

An earnest money offer is a formal offer to buy a home that includes a check for several thousand dollars to show that the buyer is genuinely interested in buying the property.

__ protects the buyer from any claims arising from a defective title.

Title insurance

A legal document that establishes ownership is a ...

title

A __ is the process of searching public records to check for ownership and claims to a piece of property.

title search

Each loan payment you make decreases your debt and increases your equity.

true

If you and the seller have agreed on the transaction, the house will be taken off the market until the deal is completed.

true

Most lenders require that the borrower buy title insurance.

true

The interest you pay on your home loan, along with the property taxes, our deductible.

true

The multiple listing service gives people wanting to buy a home a greater exposure to available homes.

true

The seller pays the real estate agents commission.

true