Question 1

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would increase the amount that a person could afford to spend on a home?

Accepted Answer

A)  increase in family income
B)  increase in interest rates
C)  decrease in down payment
D)  increase in other financial obligations
E)  increase in monthly living expensesF) A) and E)
G) B) and D)

Question 3

The purpose of an appraisal is to:

Accepted Answer

A)  estimate the current value of a home.
B)  reduce the amount paid for property taxes.
C)  qualify for a reduced mortgage rate.
D)  eliminate the need for home insurance.
E)  reduce fees paid to realtor.F) All of the above
G) A) and B)

Question 4

What is the purpose of an escrow account and what costs are typically included?

Accepted Answer

The answer of What is the purpose of an escrow...

Question 5

If you sell your home without a real estate agent,you should still employ the services of a(n) :

Accepted Answer

A)  broker.
B)  insurance agent.
C)  lawyer.
D)  contractor.
E)  rental agent.F) None of the above
G) All of the above

Question 6

The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by which the interest rate can vary.

Accepted Answer

A) True 
 B)False

Question 7

A cooperative housing arrangement involves:

Accepted Answer

A)  government-supported rental units.
B)  a nonprofit organization that rents units to its shareholders.
C)  individual ownership of a living unit in a building.
D)  factory built and on-site assembly.
E)  housing units owned by a real estate developer.F) None of the above
G) B) and C)

Question 8

Amortization refers to changes in the monthly payment for a variable rate mortgage.

Accepted Answer

A) True 
 B)False

Question 9

Ease of mobility is an advantage of renting.

Accepted Answer

A) True 
 B)False

Question 10

Ted pays $4,500 in real estate property taxes and is in the 28 percent tax bracket.What is the value of this federal tax deduction?

Accepted Answer

A)  $4,500.
B)  $3,240.
C)  $2,500.
D)  $1,260.
E)  $500.F) B) and C)
G) A) and E)

Question 11

Gary Smith is purchasing one living unit in a building.What type of housing is Gary most likely going to live in?

Accepted Answer

A)  condominium
B)  duplex
C)  cooperative
D)  prefabricated home
E)  mobile homeF) A) and D)
G) All of the above

Question 12

An FHA-insured mortgage has less risk than a conventional mortgage for the financial institution.

Accepted Answer

A) True 
 B)False

Question 13

Current interest rates can affect the price of a home.

Accepted Answer

A) True 
 B)False

Question 14

Kate plans to rent instead of buying her housing.Which advantage of renting will she realize?

Accepted Answer

A)  tax deductions
B)  lower initial costs
C)  property appreciation
D)  restricted lifestyle
E)  home improvement flexibilityF) A) and D)
G) A) and B)

Question 15

Which of the following would increase the speed of equity growth for a homebuyer?

Accepted Answer

A)  making a down payment of 10 percent instead of 20 percent
B)  obtaining a mortgage interest rate of 9 percent instead of 8 percent
C)  obtaining a 15-year mortgage instead of a 30-year mortgage
D)  making larger deposits to the escrow account
E)  obtaining an interest-only mortgageF) A) and E)
G) None of the above

Question 16

A renter is required to pay a security deposit of $800,on which 4 percent interest will be paid.What amount would the person earn each year?

Accepted Answer

A)  $100
B)  $64
C)  $32
D)  $16
E)  $4F) B) and E)
G) A) and B)

Question 17

The legal document involved in renting an apartment is called a(n) :

Accepted Answer

A)  service contract.
B)  mortgage.
C)  lease.
D)  security deposit.
E)  escrow account.F) B) and C)
G) A) and E)

Question 18

A deed is the document that transfers ownership of the property from one person to another.

Accepted Answer

A) True 
 B)False

Question 19

Explain negative amortization and how such a situation can occur.

Accepted Answer

The answer of Explain negative amortization and how such a...

Question 20

The purpose of zoning laws is to:

Accepted Answer

A)  restrict property use.
B)  encourage new housing development.
C)  minimize people moving from an area.
D)  reduce real estate property taxes.
E)  assist real estate agents in finding homes for salE.F) B) and C)
G) D) and E)

Exam 9: The Housing Decision: Factors and Finances

Kate plans to rent instead of buying her housing.Which advantage of renting will she realize?

Correct AnswerverifiedShow Answer

The purpose of zoning laws is to:

Correct AnswerverifiedShow Answer

A renter is required to pay a security deposit of $800,on which 4 percent interest will be paid.What amount would the person earn each year?

Correct AnswerverifiedShow Answer

An FHA-insured mortgage has less risk than a conventional mortgage for the financial institution.

Correct AnswerverifiedShow Answer

Explain negative amortization and how such a situation can occur.

Correct AnswerverifiedShow Answer

Amortization refers to changes in the monthly payment for a variable rate mortgage.

Correct AnswerverifiedShow Answer

Ted pays $4,500 in real estate property taxes and is in the 28 percent tax bracket.What is the value of this federal tax deduction?

Correct AnswerverifiedShow Answer

Gary Smith is purchasing one living unit in a building.What type of housing is Gary most likely going to live in?

Correct AnswerverifiedShow Answer

The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by which the interest rate can vary.

Correct AnswerverifiedShow Answer

Which of the following would increase the speed of equity growth for a homebuyer?

Correct AnswerverifiedShow Answer

Ease of mobility is an advantage of renting.

Correct AnswerverifiedShow Answer

What is the purpose of an escrow account and what costs are typically included?

Correct AnswerverifiedShow Answer

The legal document involved in renting an apartment is called a(n) :

Correct AnswerverifiedShow Answer

If you sell your home without a real estate agent,you should still employ the services of a(n) :

Correct AnswerverifiedShow Answer

Current interest rates can affect the price of a home.

Correct AnswerverifiedShow Answer

Cooperative housing is a form of housing in which the units in a building are owned by a nonprofit organization.

Correct AnswerverifiedShow Answer

A cooperative housing arrangement involves:

Correct AnswerverifiedShow Answer

Which of the following would increase the amount that a person could afford to spend on a home?

Correct AnswerverifiedShow Answer

The purpose of an appraisal is to:

Correct AnswerverifiedShow Answer

A deed is the document that transfers ownership of the property from one person to another.

Correct AnswerverifiedShow Answer

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