Question 1

One significant drawback of home ownership is financial commitment.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Gerry Bruce is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Accepted Answer

1. determining housing needs,
...

Question 4

Qualifying for a mortgage is much different then obtaining other forms of credit.

Accepted Answer

A) True 
 B)False

Question 5

A cost associated with home buying would be

Accepted Answer

A)   appraisal.
B)   property taxes.
C)   legal fees.
D)   A & B are correct.
E)   A, B and C are correct.F) A) and D)
G) B) and E) D

Question 6

Lenders commonly use a TDS ratio of _________ and a GDS ratio of __________ to help determine the amount most people can comfortably afford for housing.

Accepted Answer

A)   20%; 30%
B)   40%; 20%
C)   40%; 30%
D)   30%; 20%
E)   20%; 40%F) A) and E)
G) D) and E)

Question 7

A cooperative housing arrangement involves

Accepted Answer

A)   government-supported rental units.
B)   a nonprofit organization.
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) C) and D)
G) A) and B)

Question 8

Condominiums involve the purchase of an individual living unit rather than an entire building.

Accepted Answer

A) True 
 B)False  True

Question 9

Most people select a place of residence based on available financial resources, needs, and lifestyle.

Accepted Answer

A) True 
 B)False

Question 10

If you decide to purchase a condominium for potential benefits you are probably:

Accepted Answer

A)   single parent.
B)   young couple, no children.
C)   couple, young children
D)   young single
E)   retired person.F) B) and C)
G) A) and E)

Question 11

The purpose of a rate cap with a variable rate mortgage is to

Accepted Answer

A)   minimize interest costs.
B)   prevent changes in the amount of the monthly payment.
C)   increase negative amortization.
D)   restrict the amount by which the interest rate can increase.
E)   lower the escrow account.F) A) and E)
G) All of the above

Question 12

The amount of the down payment will affect the amount of mortgage a person can afford.

Accepted Answer

A) True 
 B)False  True

Question 13

What factors influence the type of housing a family will select?

Accepted Answer

Selection of housing is influe...

Question 14

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

Accepted Answer

A)   100
B)   80
C)   60
D)   40
E)   20F) B) and E)
G) A) and E)

Question 15

Condominiums involve the purchase of an entire building.

Accepted Answer

A) True 
 B)False

Question 16

Given the following, calculate the GDS ratio. All income and expense items are annual.   Gross income $55,000 Bank account $1,000 Net income $38,000 Property taxes $3,600 Heating $4,800 Annual car payment $4,200 Credit card balance $2,500 Car loan balance $10,000 Student loan payments $2,400 Mortgage payments $15,600\begin{array} { | l | r | l | r | } \hline 	ext { Gross income } & \mathbf { \$ 5 5 , 0 0 0 } & 	ext { Bank account } & \mathbf { \$ 1 , 0 0 0 } \\hline 	ext { Net income } & \$ 38,000 & 	ext { Property taxes } & \$ 3,600 \\hline 	ext { Heating } & \$ 4,800 & 	ext { Annual car payment } & \$ 4,200 \\hline 	ext { Credit card balance } & \$ 2,500 & 	ext { Car loan balance } & \$ 10,000 \\hline 	ext { Student loan payments } & \$ 2,400 & 	ext { Mortgage payments } & \$ 15,600 \\hline\end{array} Gross income  Net income  Heating  Credit card balance  Student loan payments ​$55,000$38,000$4,800$2,500$2,400​ Bank account  Property taxes  Annual car payment  Car loan balance  Mortgage payments ​$1,000$3,600$4,200$10,000$15,600​​

Accepted Answer

A)   28%
B)   41%
C)   44%
D)   52%
E)   63% F) B) and E)
G) A) and B)

Question 17

Real estate agents will provide you with services and are paid commission on the selling of a home.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following expenses is paid from an escrow account?

Accepted Answer

A)   title insurance
B)   property insurance
C)   points
D)   loan application fee
E)   real estate agent's commissionF) D) and E)
G) A) and D)

Question 19

At the closing of home purchase, the "earnest" money has the purpose of:

Accepted Answer

A)   paying real estate property taxes.
B)   reducing the mortgage interest rate.
C)   paying a mortgage application fee.
D)   paying the real estate agent's commission.
E)   serving as evidence of serious intent.F) B) and D)
G) A) and C)

Question 20

Which of the following are disadvantages of home ownership?

Accepted Answer

A)   limited responsibility
B)   few financial benefits
C)   low initial costs.
D)   financial commitment.
E)   lifestyle flexibility.F) A) and E)
G) A) and B)

Exam 7: The Finances of Housing

One significant drawback of home ownership is financial commitment.

Correct Answer
verified

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

Correct Answer
verified

Gerry Bruce is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct Answer
verified
1. determining housing needs,
...
View Answer

Qualifying for a mortgage is much different then obtaining other forms of credit.

Correct Answer
verified

A cost associated with home buying would be

Correct Answer
verified
D

Lenders commonly use a TDS ratio of _ and a GDS ratio of __ to help determine the amount most people can comfortably afford for housing.

Correct Answer
verified

A cooperative housing arrangement involves

Correct Answer
verified

Condominiums involve the purchase of an individual living unit rather than an entire building.

Correct Answer
verified
True

Most people select a place of residence based on available financial resources, needs, and lifestyle.

Correct Answer
verified

If you decide to purchase a condominium for potential benefits you are probably:

Correct Answer
verified

The purpose of a rate cap with a variable rate mortgage is to

Correct Answer
verified

The amount of the down payment will affect the amount of mortgage a person can afford.

Correct Answer
verified
True

What factors influence the type of housing a family will select?

Correct Answer
verified
Selection of housing is influe...
View Answer

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

Correct Answer
verified

Condominiums involve the purchase of an entire building.

Correct Answer
verified

Correct Answer
verified

Real estate agents will provide you with services and are paid commission on the selling of a home.

Correct Answer
verified

Which of the following expenses is paid from an escrow account?

Correct Answer
verified

At the closing of home purchase, the "earnest" money has the purpose of:

Correct Answer
verified

Which of the following are disadvantages of home ownership?

Correct Answer
verified

Exam 7: The Finances of Housing

One significant drawback of home ownership is financial commitment.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gerry Bruce is considering buying a home. What actions would you recommend for her to take to accomplish this goal of buying a home?

Correct Answerverified1. determining housing needs,...View AnswerShow Answer

Qualifying for a mortgage is much different then obtaining other forms of credit.

Correct AnswerverifiedShow Answer

A cost associated with home buying would be

Correct AnswerverifiedD

Lenders commonly use a TDS ratio of _________ and a GDS ratio of __________ to help determine the amount most people can comfortably afford for housing.

Correct AnswerverifiedShow Answer

A cooperative housing arrangement involves

Correct AnswerverifiedShow Answer

Condominiums involve the purchase of an individual living unit rather than an entire building.

Correct AnswerverifiedTrue

Most people select a place of residence based on available financial resources, needs, and lifestyle.

Correct AnswerverifiedShow Answer

If you decide to purchase a condominium for potential benefits you are probably:

Correct AnswerverifiedShow Answer

The purpose of a rate cap with a variable rate mortgage is to

Correct AnswerverifiedShow Answer

The amount of the down payment will affect the amount of mortgage a person can afford.

Correct AnswerverifiedTrue

What factors influence the type of housing a family will select?

Correct AnswerverifiedSelection of housing is influe...View AnswerShow Answer

Approximately ________ percent of mortgages issued in the United States to sub-prime borrowers were adjustable-rate mortgages

Correct AnswerverifiedShow Answer

Condominiums involve the purchase of an entire building.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Real estate agents will provide you with services and are paid commission on the selling of a home.

Correct AnswerverifiedShow Answer

Which of the following expenses is paid from an escrow account?

Correct AnswerverifiedShow Answer

At the closing of home purchase, the "earnest" money has the purpose of:

Correct AnswerverifiedShow Answer

Which of the following are disadvantages of home ownership?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1. determining housing needs,
...
View Answer

Correct Answer
verified

Correct Answer
verified
D

Lenders commonly use a TDS ratio of _ and a GDS ratio of __ to help determine the amount most people can comfortably afford for housing.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified
Selection of housing is influe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified