F.L. Ch 12-Real Estate

1.

3 points

When selling a home, remember to:

Interview at least three realtors

Ignore curb appeal until you have cleaned the inside of the house

Use a good friend or relative as your realtor

Buy in the top price range of the neighborhood

2.

3 points

What is not a characteristic of an accelerated loan?

System that allows you to make a half-payment every two weeks

The interest rate adjusts periodically

Program in which the loan pays off early because you make an extra payment every year

Plan that is sometimes called a bi-weekly payoff

3.

3 points

You should buy in the middle price range of the neighborhood you want to move to.

True

False

4.

3 points

Your payment goes up when interest rates go up

5.

3 points

What does a realtor have available to them that the public doesn’t?

Contacts

MLS

Land Surveys

All of the above

6.

3 points

If you are buying a house outside of a standard subdivision, what should you get?

Home warranty

Mortgage insurance

Land survey

PMI

7.

3 points

Payments are made to the owner of the house rather than the bank

8.

3 points

Insures you against an unclean title

9.

3 points

Which is NOT a horrible mortgage option?

ARM

Conventional

Reverse mortgage

Balloon

10.

3 points

Timeshares are a good investment if you like to go on annual vacations.

True

False

11.

3 points

Which is not true about owner financing?

The buyer makes payments to the owner.

You can be creative in structuring the terms of the loan.

The fees are extremely expensive.

You could include a discount for early payoff.

12.

3 points

An opinion of value on what a house is worth

13.

3 points

The value of your house minus what you owe

14.

3 points

The multiple listing service (MLS) is the computer system that contains real estate listings from all realtors.

True

False

15.

3 points

Why do ARMs appear to be a good mortgage option?

The initial interest rate is lower, so people are able to buy the house they want.

The loan adjusts to a lower interest rate as time passes.

The bank takes on the risk of higher interest rate.

Both a and c

16.

3 points

True

False

17.

3 points

What type of insurance should you buy to protect yourself against a question of ownership?

PMI

Title

Survey

Home warranty

18.

3 points

You are ready to buy a home under the following conditions:

You have a good paying job and you have worked there for three years.

You have an emergency fund.

You have at least 10% down.

Both b and c

19.

3 points

The return on investment of fix-up dollars is minimal.

True

False

20.

3 points

If your mortgage payment exceeds 25% of your net income, you have bought more house than you can afford.

True

False

21.

3 points

Protects the lender against loss if the loan is defaulted

22.

3 points

Julie works full-time and is finishing college so she can be a teacher. What housing option would be best for her based on this information?

Rent

Buy

23.

3 points

When buying a home:

Buy in the bottom price range of the neighborhood.

Put at least 10% down.

Overlook bad landscaping and outdated cosmetic issues.

All of the above

24.

3 points

Which is an advantage of taking a 15-year mortgage vs. a 30-year mortgage?

The monthly payments are slightly higher.

The monthly payments are lower.

The difference you save in interest is significant.

There is a tax advantage with a 15-year mortgage.

25.

3 points

Which is an advantage of owning a home?

It grows tax free

It’s an inflation hedge

It’s a forced saving plan

All of the above

26.

3 points

The balance of your mortgage payment, not including interest

27.

3 points

ARM and balloon mortgages are good options for people with bad credit.

True

False

28.

3 points

Experts in buying and selling homes

29.

3 points

If you must take a loan, be sure to:

Get a fixed rate

Have a good paying job

Get a survey

Get a home warranty

30.

3 points

When selling a home, curb appeal is not as important as the appearance of the house’s interior.

True

False

31.

3 points

Loan payments on a house is called a

32.

3 points

Which of the following should you avoid buying?

Timeshares

A house near the water

A house in the bottom price range of the neighborhood

All of the above

33.

3 points

Which of the following by itself is not a good reason to buy a house?

A mortgage is a tax advantage

To avoid paying rent

Everyone else is

It can be a good inflation hedge

34.

3 points

You should always use a realtor when selling a home.

True

False

35.

3 points

PMI is optional on a conventional mortgage if you don’t have a 20% down payment.

True

False