Home Buying Quiz
Why is conducting a home inspection important prior to purchasing a house?
This will help a buyer identify if there is any damage to the house, which will save them money in the future
Is a mortgage a secured or unsecured loan?
It is a secured loan as the collateral that the loanee puts up is the house
Is a mortgage closed end credit or open end credit?
It is closed end credit
What is percent of the house value is recommended when making a down payment?
20%
What is a buyer's market? How can you tell if it is a buyer's market?
A buyer's market is when the supply of houses outweigh the demand for the houses. You can identify a buyer's market if there is an abundance of houses listed while prices are low.
What are some different types of homes?
- Mobile homes - Condominiums - Cooperative housing - Prefabricated houses
How does a homeowner's equity increase over time?
- The value of the house increases - They own more of the house over time by paying off their debt
What are some things you can do to determine if a house's price is fair or not?
- compare to what similar homes in the neighborhood have sold for recently - determine if the house suits your needs - how long the house has been on the market
What are the five steps of the home buying process?
1. Determine your home ownership needs 2. Find and evaluate a property to purchase 3. Price the property 4. Obtain financing 5. Close the transaction
What is a fixed rate mortgage? When may it be a good idea to take a fixed rate mortgage?
A fixed rate mortgage is a mortgage with a fixed interest rate which is the interest rate at the time of when the loan was granted. It may be a good idea to take a fixed rate mortgage if interest rates are low
What is a foreclosure?
A foreclosure is when a loanee does not pay their debt off and so the lender seizes the property back
What is a seller's market? How can you tell if it is a seller's market?
A seller's market is when the demand for houses outweigh the supply. You can identify a seller's market if there is not a lot of houses on the market while prices are high.
What are some advantages and disadvantages of buying a home?
Advantages: - builds equity in a house that could potentially increase in value - buying a home has tax benefits - pride of ownership Disadvantages: - loss of mobility - value of the house may not go up over time - can cost a lot upfront and to maintain
What is an escrow account?
An account where money is held in trust until it can be delivered to a designated party
What is an adjustable rate mortgage? When may it be a good idea to take an adjustable rate mortgage?
An adjustable rate mortgage is a mortgage with an interest rate that fluctuates according to economic indicators. It may be a good idea to take a fixed rate mortgage if interest rates are high during the time of when the loan was granted.
