Chapter 7 - Selecting and Financing Housing
If you have a $210,000, 30-year, 5 percent mortgage, how much of your first monthly payment of $1,128.75 would go toward interest? Hint: Interest = Principal × Interest rate × Time
$875
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
Frank and Diane want to buy a house. Which of the following do they need before they purchase a house?
A down payment
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.
Which of the following gives the landlord the right to take legal action against a tenant for nonpayment of rent or destruction of property?
A lease
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
What should a home buyer consider when evaluating a house?
All of these should be evaluated.
When Nancy buys her house, the mortgage company will usually conduct:
An appraisal.
If you have an interest rate subsidy from a home builder or real estate developer, you have a(n):
Buy-down.
Pauline just submitted an offer on her dream home. As evidence of good faith, she also included:
Earnest money.
A disadvantage of home ownership is the deductibility of mortgage interest and real estate tax payments. True or False
False
Home equity is the current market value less the assessed value True or False
False
When interest rates are high and the demand for homes is low, prices of homes will likely be higher. True or False
False
When Ingrid was selling her house, she contacted Gabe, her real estate agent, to help her with the sale. Gabe's services included all of the following except:
Home appraisal.
The owner/landlord is known as the:
Lessor
Diane purchased her house and had it assembled before it was moved to her lot. She purchased a:
Manufactured home.
ARM Interest Rate Adjustment
Margin + Interset = Rate
Private mortgage insurance:
Must be terminated automatically when the homeowner's equity reaches 22% of the property value at the time the mortgage was executed.
During the closing for a home purchase, you will normally do which of the following?
Pay all closing costs, settle last-minute details, and sign documents
The opportunity to have another person take over rent payments and live in the rental unit is called (a):
Subletting
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.
Major factors that affect the affordability of your mortgage include all of the following except:
The size of the home.
Which of the following is NOT correct regarding real estate agents?
They require that you conduct your own showings.
A real estate agent can help screen potential buyers to determine whether they will qualify for a mortgage True or False
True
A renter may have the right to sublet an apartment. True or False
True
Angela wanted to rent an apartment, so her landlord required her to sign a lease. The lease is a legal document that defines the conditions of her rental agreement. True or False
True
Lenny the landlord has the right to take legal action against Tina the tenant for nonpayment of rent or destruction of property. True or False
True
Renter's insurance protects the tenant by covering damage or theft to clothing, furniture, and stereo equipment. True or False
True
Which of the following is NOT correct?
When showing the home, Caryn's suggestion to open drapes but keep lights turned off to conserve energy will give her property a positive image.
