Question 1

If you purchase a house worth $110,000 and make a 10% down payment, how much would 1 mortgage point cost at closing?

Accepted Answer

A)  $765 
B)  $990 
C)  $1,100 
D)  $1,530 
E)  $1,800 
A)  $765 
B)  $990 
C)  $1,100 
D)  $1,530 
E)  $1,800 B

Question 2

The first step in the auto-buying process should be:

Accepted Answer

A)  to test-drive several automobiles. 
B)  to begin negotiations on various automobiles. 
C)  to decide whether to trade in your used car or to sell it yourself. 
D)  to consider alternative buying strategies. 
E)  to analyze how much you can afford to spend on the car. 
A)  to test-drive several automobiles. 
B)  to begin negotiations on various automobiles. 
C)  to decide whether to trade in your used car or to sell it yourself. 
D)  to consider alternative buying strategies. 
E)  to analyze how much you can afford to spend on the car. E

Question 3

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

Accepted Answer

A)  $100,000. 
B)  $80,000. 
C)  $180,000. 
D)  $20,000. 
E)  $120,000. 
A)  $100,000. 
B)  $80,000. 
C)  $180,000. 
D)  $20,000. 
E)  $120,000. D

Question 4

The data in a Multiple Listing Service (MLS):

Accepted Answer

A)  eliminate the need for a real estate agent. 
B)  are accessible to buyers and sellers directly. 
C)  include the entire ownership history of the listed properties. 
D)  deal only with undervalued properties that are authorized by the government within a geographic location. 
E)  consist of a comprehensive listing of properties for sale in a given community area. 
A)  eliminate the need for a real estate agent. 
B)  are accessible to buyers and sellers directly. 
C)  include the entire ownership history of the listed properties. 
D)  deal only with undervalued properties that are authorized by the government within a geographic location. 
E)  consist of a comprehensive listing of properties for sale in a given community area.

Question 5

Which of the following is usually the biggest fixed auto ownership cost?

Accepted Answer

A)  The cost of fuel 
B)  The cost of oil 
C)  The cost of installment loan payments 
D)  The cost of maintenance and repair 
E)  The cost of tires 
A)  The cost of fuel 
B)  The cost of oil 
C)  The cost of installment loan payments 
D)  The cost of maintenance and repair 
E)  The cost of tires

Question 6

To refinance a mortgage, the lender typically requires you to have at least 20% equity in your home.

Accepted Answer

A) True 
 B)False

Question 7

Variable auto ownership costs are dependent on the:

Accepted Answer

A)  driver's behavior. 
B)  miles covered by the automobile. 
C)  installment payments on a car loan. 
D)  down payment. 
E)  periodic renewals of vehicle registration. 
A)  driver's behavior. 
B)  miles covered by the automobile. 
C)  installment payments on a car loan. 
D)  down payment. 
E)  periodic renewals of vehicle registration.

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
The Real Estate Settlement Procedures Act (RESPA) [ limits the amount of closing costs a lender can charge | requires advance disclosure of closing costs ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 9

The affordability ratios that are used to qualify applicants for FHA loans are more stringent than those used for conventional loans.

Accepted Answer

A) True 
 B)False

Question 10

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

Accepted Answer

A)  $1,350. 
B)  $1,500. 
C)  $2,850. 
D)  $150. 
E)  $900. 
A)  $1,350. 
B)  $1,500. 
C)  $2,850. 
D)  $150. 
E)  $900.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
A real estate agent will typically be paid by the [ buyer | seller ] of the house.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
A common rule of thumb is that you shouldn't buy a home unless you expect to stay in it at least [ 3 | 5 ] years.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 13

The market price of a house is $125,000, and the home buyer borrows $100,000. Two points are equal to $2,000.

Accepted Answer

A) True 
 B)False

Question 14

You made a $900 mortgage payment. The interest of $925 on the mortgage for this month leads to an increase in the principal balance. You have:

Accepted Answer

A)  experienced negative amortization. 
B)  signed up for a conventional mortgage. 
C)  refinanced your loan. 
D)  taken a fixed-rate mortgage. 
E)  accepted a buydown. 
A)  experienced negative amortization. 
B)  signed up for a conventional mortgage. 
C)  refinanced your loan. 
D)  taken a fixed-rate mortgage. 
E)  accepted a buydown.

Question 15

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

Accepted Answer

A)  75% 
B)  80% 
C)  85% 
D)  90% 
E)  95% 
A)  75% 
B)  80% 
C)  85% 
D)  90% 
E)  95%

Question 16

A condominium buyer will make monthly mortgage payments, as well as pay a fee for maintenance of common areas.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following are tax deductible if you itemize deductions?

Accepted Answer

A)  Mortgage principal, mortgage interest, property taxes, and homeowner's insurance 
B)  Mortgage principal, mortgage interest, and property taxes 
C)  Mortgage principal and mortgage interest 
D)  Mortgage interest, property taxes, and homeowner's insurance 
E)  Mortgage interest and property taxes 
A)  Mortgage principal, mortgage interest, property taxes, and homeowner's insurance 
B)  Mortgage principal, mortgage interest, and property taxes 
C)  Mortgage principal and mortgage interest 
D)  Mortgage interest, property taxes, and homeowner's insurance 
E)  Mortgage interest and property taxes

Question 18

A type of financing made available by a builder or seller to a potential new-home buyer at well below market interest rates, often only for a short period, is termed a:

Accepted Answer

A)  conventional mortgage. 
B)  convertible adjustable-rate mortgage (ARM). 
C)  buydown. 
D)  two-step adjustable-rate mortgage (ARM). 
E)  growing-equity mortgage. 
A)  conventional mortgage. 
B)  convertible adjustable-rate mortgage (ARM). 
C)  buydown. 
D)  two-step adjustable-rate mortgage (ARM). 
E)  growing-equity mortgage.

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. 
Homeowner's insurance is required by mortgage lenders and covers [ the replacement value of the house, its contents, and the land | only the replacement value of the home and its contents ].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

Which of the following is a type of down payment that lowers the potential depreciation and therefore your monthly lease payments on a leased car?

Accepted Answer

A)  Money factor 
B)  Property depreciation cost 
C)  Initial residual value 
D)  Purchase option 
E)  Capital cost reduction 
A)  Money factor 
B)  Property depreciation cost 
C)  Initial residual value 
D)  Purchase option 
E)  Capital cost reduction

If you purchase a house worth $110,000 and make a 10% down payment, how much would 1 mortgage point cost at closing?

The first step in the auto-buying process should be:

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

The data in a Multiple Listing Service (MLS):

Which of the following is usually the biggest fixed auto ownership cost?

To refinance a mortgage, the lender typically requires you to have at least 20% equity in your home.

Variable auto ownership costs are dependent on the:

The affordability ratios that are used to qualify applicants for FHA loans are more stringent than those used for conventional loans.

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A real estate agent will typically be paid by the [ buyer | seller ] of the house.

The market price of a house is $125,000, and the home buyer borrows $100,000. Two points are equal to $2,000.

You made a $900 mortgage payment. The interest of $925 on the mortgage for this month leads to an increase in the principal balance. You have:

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

A condominium buyer will make monthly mortgage payments, as well as pay a fee for maintenance of common areas.

Which of the following are tax deductible if you itemize deductions?

A type of financing made available by a builder or seller to a potential new-home buyer at well below market interest rates, often only for a short period, is termed a:

Which of the following is a type of down payment that lowers the potential depreciation and therefore your monthly lease payments on a leased car?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

If you purchase a house worth $110,000 and make a 10% down payment, how much would 1 mortgage point cost at closing?

The first step in the auto-buying process should be:

If the maximum loan-to-value ratio that a lender will accept on a house costing $100,000 is 80%, then the borrower must make a down payment of at least:

The data in a Multiple Listing Service (MLS):

Which of the following is usually the biggest fixed auto ownership cost?

To refinance a mortgage, the lender typically requires you to have at least 20% equity in your home.

Variable auto ownership costs are dependent on the:

The affordability ratios that are used to qualify applicants for FHA loans are more stringent than those used for conventional loans.

If your lender charges 1.5 mortgage points on a house selling for $100,000, on which there is a $90,000 loan, the points will cost you:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A real estate agent will typically be paid by the [ buyer | seller ] of the house.

The market price of a house is $125,000, and the home buyer borrows $100,000. Two points are equal to $2,000.

You made a $900 mortgage payment. The interest of $925 on the mortgage for this month leads to an increase in the principal balance. You have:

A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).

A condominium buyer will make monthly mortgage payments, as well as pay a fee for maintenance of common areas.

Which of the following are tax deductible if you itemize deductions?

A type of financing made available by a builder or seller to a potential new-home buyer at well below market interest rates, often only for a short period, is termed a:

Which of the following is a type of down payment that lowers the potential depreciation and therefore your monthly lease payments on a leased car?

Understanding the Financial Planning Process

Developing Your Financial Statements and Plans

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds and Real Estate

Planning for Retirement

Preserving Your Estate

Filters