Personal Finance Chapter 7 Assessment

Which of the following is a form of housing in which the owners pay a monthly fee for maintenance of the common areas

a condominium

Lonnie wanted to sell his house but didn't know what price to ask. He should consider all of the following except

his original cost

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

points

Crystal is looking for a new apartment. Given the information below, what are her total annual costs associated with renting? Monthly rent payments: $1,000 Annual renter's insurance: $250 Annual interest lost on security deposit: $20 Value of apartment: $150,000

$12,270 ($1,000 x 12 months)+$250+$20=$12,270

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

$180.23 Interest = Principal × Interest rate × Time = $150,000 × 5% × 1 month/12 months = $625.00. Principal = Total payment − Interest $805.23 − $625.00 = $180.23.

Ursula wants to have an interest rate that can increase or decrease during the life of her loan. She should look for a(n)

ARM

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(n)

FHA loan

Franklin wants to sell his house himself. Which of the following is NOT good advice about his sale

He should show the house only when he is home alone

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

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

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

Townhouse

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

If you are selling your house by owner, you should still enlist the assistance of

a lawyer or title company to assist with the contract, closing, and other legal matters

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

an advantage is that the down payment required is typically less than the security deposit for a rental

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(n)

interest-only mortgage

The tenant is the

lessee

Veronica has had a variable-rate mortgage for several years. Unfortunately, the monthly mortgage payments have not covered her interest owned. As a result, her home equity is decreasing because of

negative amortization

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

Major factors that affect the affordability of your mortgage include all of the following except

the size of the home