Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

Selection of housing is influenced by an individual's or family's needs,values,and lifestyle,along with the financial situation and availability of financial resources.

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

The total debt service ratio is your monthly mortgage payment and other outstanding debts as a percentage of your gross monthly income.

Accepted Answer

A) True 
 B)False

Question 5

Zoning laws are restrictions on how the property area can be used.

Accepted Answer

A) True 
 B)False

Question 6

The main financial benefit of renting is

Accepted Answer

A)  tax deductions. 
B)  increased equity. 
C)  investment value growth. 
D)  lower initial costs. 
E)  high financial commitment. 
A)  tax deductions. 
B)  increased equity. 
C)  investment value growth. 
D)  lower initial costs. 
E)  high financial commitment.

Question 7

You made a $100,000 down payment on a $400,000 house and financed the remaining amount with a Canadian fixed-rate mortgage.Your mortgage has a term of three years,an amortization period of 25 years,a quoted rate of 7% and payments are made monthly.Identify the correct statement.

Accepted Answer

A)  The 7% quoted rate does not represent the effective annual rate charged on the mortgage. 
B)  The interest rate is fixed for 25 years. 
C)  You will make a total of 36 monthly payments to pay off the mortgage. 
D)  You have a high-ratio mortgage. 
E)  Your interest rate is fixed for 3 years,variable for 22 years. 
A)  The 7% quoted rate does not represent the effective annual rate charged on the mortgage. 
B)  The interest rate is fixed for 25 years. 
C)  You will make a total of 36 monthly payments to pay off the mortgage. 
D)  You have a high-ratio mortgage. 
E)  Your interest rate is fixed for 3 years,variable for 22 years.

Question 8

The Gross Debt Service (GDS)ratio measures:

Accepted Answer

A)  your monthly mortgage payment,including any outstanding debt as a percentage of gross monthly income. 
B)  your monthly mortgage payment,including principal,interest,heating,and taxes as a percentage of gross monthly income. 
C)  your monthly mortgage payment as a percentage of gross monthly income. 
D)  your annual mortgage payment,including any outstanding debt,as a percentage of gross annual income. 
E)  your annual mortgage payment,including principal,interest,heating,and taxes,as a percentage of gross annual income. 
A)  your monthly mortgage payment,including any outstanding debt as a percentage of gross monthly income. 
B)  your monthly mortgage payment,including principal,interest,heating,and taxes as a percentage of gross monthly income. 
C)  your monthly mortgage payment as a percentage of gross monthly income. 
D)  your annual mortgage payment,including any outstanding debt,as a percentage of gross annual income. 
E)  your annual mortgage payment,including principal,interest,heating,and taxes,as a percentage of gross annual income.

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

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. 
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.

Question 11

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% 
A)  20%,30% 
B)  40%,20% 
C)  40%,30% 
D)  30%,20% 
E)  20%,40%

Question 12

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent,what are the effective annual rate and the effective monthly rate?

Accepted Answer

A)  4.5 percent,1 percent 
B)  9 percent,0.75 percent 
C)  9.2 percent,0.736 percent 
D)  18.81 percent,0.75 percent 
E)  18.81 percent.0.736 percent 
A)  4.5 percent,1 percent 
B)  9 percent,0.75 percent 
C)  9.2 percent,0.736 percent 
D)  18.81 percent,0.75 percent 
E)  18.81 percent.0.736 percent

Question 13

Which of the following is an example of a conventional mortgage?

Accepted Answer

A)  a First Home mortgage 
B)  a buy down 
C)  a fixed rate mortgage 
D)  a shared appreciation mortgage 
E)  a home equity loan 
A)  a First Home mortgage 
B)  a buy down 
C)  a fixed rate mortgage 
D)  a shared appreciation mortgage 
E)  a home equity loan

Question 14

Which of the following is not a common financial risk of home ownership?

Accepted Answer

A)  interest rates may change. 
B)  property values may decrease. 
C)  repairs and maintenance. 
D)  susceptibility to macroeconomic factors 
E)  capital gains taxes on the sale of a principal residence. 
A)  interest rates may change. 
B)  property values may decrease. 
C)  repairs and maintenance. 
D)  susceptibility to macroeconomic factors 
E)  capital gains taxes on the sale of a principal residence.

Question 15

Given the following,calculate the GDS ratio.All income and expense items are annual.

Accepted Answer

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

Question 16

Which document is used to transfer ownership of property from one party to another?

Accepted Answer

A)  Title 
B)  Escrow account 
C)  Settlement statement 
D)  Appraisal 
E)  Deed 
A)  Title 
B)  Escrow account 
C)  Settlement statement 
D)  Appraisal 
E)  Deed

Question 17

The gross debt service ratio is your monthly mortgage payment (including principal,interest,heating and taxes)as a percentage of your gross monthly income.

Accepted Answer

A) True 
 B)False

Question 18

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. 
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.

Question 19

The purpose of a counteroffer is to

Accepted Answer

A)  negotiate the purchase price. 
B)  reduce mortgage payments. 
C)  lower real estate property taxes. 
D)  avoid paying points at closing. 
E)  avoid paying the real estate agent's commission. 
A)  negotiate the purchase price. 
B)  reduce mortgage payments. 
C)  lower real estate property taxes. 
D)  avoid paying points at closing. 
E)  avoid paying the real estate agent's commission.

Question 20

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

Accepted Answer

A) True 
 B)False

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

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

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

The total debt service ratio is your monthly mortgage payment and other outstanding debts as a percentage of your gross monthly income.

Zoning laws are restrictions on how the property area can be used.

The main financial benefit of renting is

You made a $100,000 down payment on a $400,000 house and financed the remaining amount with a Canadian fixed-rate mortgage.Your mortgage has a term of three years,an amortization period of 25 years,a quoted rate of 7% and payments are made monthly.Identify the correct statement.

The Gross Debt Service (GDS)ratio measures:

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

A cooperative housing arrangement involves

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

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent,what are the effective annual rate and the effective monthly rate?

Which of the following is an example of a conventional mortgage?

Which of the following is not a common financial risk of home ownership?

Given the following,calculate the GDS ratio.All income and expense items are annual.

Which document is used to transfer ownership of property from one party to another?

The gross debt service ratio is your monthly mortgage payment (including principal,interest,heating and taxes)as a percentage of your gross monthly income.

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

The purpose of a counteroffer is to

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Daily Spending Diary

Filters

Exam 7: Selecting and Financing Housing

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

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

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

The total debt service ratio is your monthly mortgage payment and other outstanding debts as a percentage of your gross monthly income.

Zoning laws are restrictions on how the property area can be used.

The main financial benefit of renting is

You made a $100,000 down payment on a $400,000 house and financed the remaining amount with a Canadian fixed-rate mortgage.Your mortgage has a term of three years,an amortization period of 25 years,a quoted rate of 7% and payments are made monthly.Identify the correct statement.

The Gross Debt Service (GDS)ratio measures:

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

A cooperative housing arrangement involves

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

Assuming semi-annual compounding and a quoted mortgage rate of 9 percent,what are the effective annual rate and the effective monthly rate?

Which of the following is an example of a conventional mortgage?

Which of the following is not a common financial risk of home ownership?

Given the following,calculate the GDS ratio.All income and expense items are annual.

Which document is used to transfer ownership of property from one party to another?

The gross debt service ratio is your monthly mortgage payment (including principal,interest,heating and taxes)as a percentage of your gross monthly income.

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

The purpose of a counteroffer is to

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

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Accounts

Consumer Credit: Advantages, Disadvantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Home and Automobile Insurance

Health and Disability Income Insurance

Financial Planning With Life Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Daily Spending Diary

Filters

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