Other Costs of Buying a Home
To close on a home purchase you only need to pay the down payment and realtor fees.
F
When buying a home, the lender may hold money in an escrow account to pay _____.
c. property taxes
A lender estimates the closing costs on a home loan will be 3% of the loan amount of $180,000. The actual closing costs are listed below.
a. The lender made an excellent estimate; it was equal to the actual closing costs.
A lender estimates the closing costs on a home loan will be 3% of the loan amount of $180,000. The actual closing costs are listed below. Evaluate the lender's good faith estimate.
a. The lender made an excellent estimate; it was equal to the actual closing costs.
Mr. and Mrs. Zeller close on a 20 year home loan for $150,000. The monthly payment with no points is $1,160, but if they buy a point it is $1,150. What might you infer if Mr.and Mrs. Zeller choose not to buy a point?
a. They plan to sell the house at the end of 5 years.
Which of the following refers to the cost associated with getting a statement of the property value when buying a home?
a. appraisal
Fees paid at the time of a home loan transaction between the buyer, seller and lender are called _____. a. application costs b. closing costs c. lending costs d. purchase costs
b
The following closing costs were paid on a home loan. If the closing costs were 5% of the loan amount, how much was the loan amount?
b. $70,880
Yolanda closed on a 20 year home loan for $83,000. She chooses to buy only 1 point at closing. By buying a point at her closing, Yolanda reduced her monthly payment by $7.63. Based on the fact that Yolanda chose to buy a point at closing, what would you infer is the minimum amount of time that she will own the home?
b. 11 years
In what range do the closing costs on a home loan typically fall?
b. 3% to 5%
Without buying points, a monthly mortgage payment will be $1,250. Buying 1 point at closing would reduce the payment to $1,236. To the nearest year, how long would it take to break even by buying 1 point, with a $100,000 mortgage?
b. 6 years
What is the benefit of paying discount points as part of the closing costs?
b. Typically points lower the interest rate on the mortgage. The more points that a buyer pays up front, the lower the interest rate.
A lender estimates that the closing costs on a $312,500 home loan will be $12,500. The actual closing costs were 4.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent.
b. higher by 0.25%
Without buying points, a monthly mortgage payment will be $958. Buying 1 point at closing would reduce the payment to $948.75. If each point is costs $1000.00, rounded to the nearest year, how long would it take to break even by buying 1 point?
c. 9 years
Which of the following is not true about a loan discount point?
c. A point reduces the interest rate by 1%.
Money held by the lender to pay homeowners insurance and property taxes is put in a fund called _____.
c. escrow
A lender estimates that the closing costs on a $165,000 home loan will be $6,187.50. The actual closing costs were 3.5% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent?
c. lower by 0.25%
In addition to the following closing costs listed below, the buyer pays a realtor commission that is 3.5% of the loan amount. Closing Cost Charge Loan origination $280 Title insurance $476 Attorney's fees $675 Inspection $200 Recording fees $118 Escrow $573 If the loan amount is $165,000, how much was paid at closing? a. $2,322 b. $2,899 c. $5,775 d. $8,097
d
Why are closing costs a one time fee?
d. The closing costs cover titles, taxes, and realtor costs. After closing, the only monetary obligation is to the lending party.
A lender estimates the closing costs on a home loan will be 3.75% of the loan amount of $120,000. The actual closing costs are listed below.
d. The lender made a poor estimate; it was off by more than 0.5% of the actual closing costs.
In which of the following cases would you most likely buy a point when closing on a home loan?
d. The monthly payment is reduced by $14 and you plan to sell the home at the end of 7 years.
A lender estimates that the closing costs on a $293,600 home loan will be $11,010. The actual closing costs were 3.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent?
d. lower by 0.5%