PERSONAL FINANCE CH 7/8 EXAM

Brett bought a house five years ago for $150,000. At that time, he borrowed $140,000 from his bank. The house is now worth $162,000. The current value of his mortgage must be no higher than_______for him to request termination of his PMI policy.

$126,360

Given the information below, what is the total cost of renting per year? Annual rent payments$ 14,400Annual renter's insurance$ 300Annual interest lost on security deposit$ 10Value of apartment$ 150,000

$14,710

If you have a $150,000, 30-year, 5 percent mortgage, how much of your first monthly payment of $805.23 would go toward principal?

$180.23

If you have a $150,000, 30-year, 5 percent mortgage, how much of your first monthly payment of $805.23 would go toward interest?

$625.00 Interest = Principal × Interest rate × Time = $150,000 × 5% × 1 month/12 months = $625.00.

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 dual agent.

Paul and Lora built their home. When they researched contractors, they should have considered all of the following except:

Contractors' property tax payments during construction.

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(n) ______ on the interest rate.

Escrow

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(n) ______ on the interest rate

LOCK

Yvette has a flexible-rate mortgage that limits the amount to which her monthly payments can rise. This feature is called a(n):

PAYMENT CAP

Rebecca paid extra money to reduce her mortgage interest rate. That extra money is called:

POINTS

Which of the following expenses is NOT usually incurred by a tenant?

Property taxes

Which of the following is an advantage of renting?

Renters have fewer responsibilities for maintenance than home owners.

The opportunity to have another person take over rent payments and live in the rental unit is called (a):

Subletting.

Elaine purchased her living unit in a building with five other separate units. She purchased a:

TOWNHOUSE

Walt has decided to sell the home he has lived in for 50 years. The house has two bedrooms on the first floor, a finished basement, and a finished attic with a low ceiling. To prepare his home for sale, he should:

Take steps to remove excess furniture to make areas look less cluttered and therefore larger.

Which of the following is a disadvantage of renting?

Tenants cannot take tax deductions for mortgage interest and property taxes

Most tenants sign a lease. Which of the following is part of a lease agreement?

The conditions under which the landlord may enter the apartment.

Which of the following is NOT correct regarding real estate agents?

They require that you conduct your own showings.

Georgina and Henry have a family and are looking at houses. Which of the following is correct?

They should assess the school system in the area they want to live

Which of the following is NOT correct?

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