Question 1

Which one of these situations creates negative amortization?

Accepted Answer

A)  When the amount of the monthly mortgage payment increases
B)  When the monthly mortgage payment does not cover the interest owed
C)  When the amount paid into an escrow account decreases
D)  When the mortgage interest rate decreases
E)  When the amount of the down payment is loweredF) A) and D)
G) D) and E)

Question 2

Which of the following is not a benefit of tiny houses (usually 400 square feet or less) ?

Accepted Answer

A)  Lower home ownership costs
B)  Environmentally friendly design
C)  Less clutter
D)  Limited privacy
E)  A simpler lifestyleF) A) and B)
G) D) and E)

Question 3

Which home improvement is least likely to increase the value of your home?

Accepted Answer

A)  Energy-efficient features
B)  A remodeled kitchen
C)  An extra bathroom
D)  A finished basement
E)  An exercise roomF) A) and C)
G) A) and B)

Question 4

Most people do not select a place of residence based on:

Accepted Answer

A)  lifestyle.
B)  needs.
C)  values.
D)  attitudes.
E)  credit score.F) B) and E)
G) A) and E)

Question 5

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

Accepted Answer

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

Question 6

Which of the following is a form of housing in which the units in a building are owned by a nonprofit organization?

Accepted Answer

A)  Mobile home
B)  Condominium
C)  Cooperative housing
D)  Duplex
E)  TownhouseF) A) and D)
G) B) and E)

Question 7

A newly married couple is having trouble affording a home.What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer?

Accepted Answer

A)  FHA-insured loan
B)  Balloon mortgage
C)  Buy-down
D)  Shared-appreciation mortgage
E)  Growing-equity mortgageF) All of the above
G) C) and D)

Question 8

A ________ is a building that contains exactly two housing units.

Accepted Answer

A)  mobile home
B)  duplex
C)  condominium
D)  prefabricated home
E)  cooperativeF) A) and B)
G) A) and C)

Question 9

The Internet of Things (IoT) is the interconnection of devices embedded in household items to send and receive data and includes all of the following,except:

Accepted Answer

A)  a smart thermostat.
B)  a ceiling fan that only turns on and off when you speak.
C)  a Wi-Fi-enabled coffee maker that is programmable.
D)  a light bulb with a speaker that streams audio from an app.
E)  an intelligent countertop oven.F) All of the above
G) C) and E)

Question 10

Which of the following can affect the price of a home?

Accepted Answer

A)  Cost of the home inspection
B)  Number of realtors in the area
C)  Cost of the appraisal
D)  Current mortgage rates
E)  Number of loan officers in the areaF) C) and D)
G) B) and E)

Question 11

Which type of home has a tendency to quickly depreciate in value?

Accepted Answer

A)  Cooperative
B)  Mobile home
C)  Condominium
D)  Duplex
E)  Previously-owned single family homeF) C) and E)
G) A) and E)

Question 12

Which of the following is an example of a closing cost?

Accepted Answer

A)  Home inspection fees
B)  Moving expenses
C)  Earnest money
D)  Title insurance
E)  Down paymentF) D) and E)
G) A) and B)

Question 13

The amount of mortgage a person is eligible for will be larger when:

Accepted Answer

A)  the value of the collateral is lower.
B)  the down payment is lower.
C)  other debt obligations are higher.
D)  the family's income is lower.
E)  the interest rates are lower.F) A) and E)
G) C) and D)

Question 14

The amount of cash available for a down payment will affect the size of the mortgage loan needed to purchase a home.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following can help you prepare your home for selling?

Accepted Answer

A)  Moving furniture to the garage
B)  Painting worn exterior
C)  Closing the drapes when showing your home
D)  Trimming the grass around old vehicles in the yard
E)  Turning off the lights to conserve energy when showing your homeF) None of the above
G) C) and E)

Question 16

A condominium involves:

Accepted Answer

A)  renting a mobile home.
B)  buying stock in a nonprofit organization.
C)  ownership of an individual housing unit in a building.
D)  government-subsidized housing.
E)  renting a house with the option to buy.F) A) and C)
G) D) and E)

Question 17

Which type of repair problem is more likely to be covered by a new homeowner service contract?

Accepted Answer

A)  Structural damage
B)  Roof damage from a hurricane
C)  Paint for worn exterior
D)  Heating and air-conditioning system failure
E)  Remodeling the kitchenF) A) and E)
G) B) and D)

Question 18

Gary Smith is purchasing one housing unit in a building with several units.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 B)
G) A) and C)

Question 19

The purpose of a rate cap with an adjustable 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 or decrease during the ARM term.
E)  lower the escrow account.F) A) and E)
G) A) and C)

Question 20

Prepaid interest may be charged by the lender for a lower mortgage rate.

Accepted Answer

A) True 
 B)False

Exam 9: The Housing Decision: Factors and Finances

Which of the following is an example of a closing cost?

Correct AnswerverifiedShow Answer

Which type of home has a tendency to quickly depreciate in value?

Correct AnswerverifiedShow Answer

Which of the following is a form of housing in which the units in a building are owned by a nonprofit organization?

Correct AnswerverifiedShow Answer

Which of the following can affect the price of a home?

Correct AnswerverifiedShow Answer

Prepaid interest may be charged by the lender for a lower mortgage rate.

Correct AnswerverifiedShow Answer

Which home improvement is least likely to increase the value of your home?

Correct AnswerverifiedShow Answer

The purpose of a rate cap with an adjustable rate mortgage is to:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A condominium involves:

Correct AnswerverifiedShow Answer

Which of the following is not a benefit of tiny houses (usually 400 square feet or less) ?

Correct AnswerverifiedShow Answer

The Internet of Things (IoT) is the interconnection of devices embedded in household items to send and receive data and includes all of the following,except:

Correct AnswerverifiedShow Answer

The amount of cash available for a down payment will affect the size of the mortgage loan needed to purchase a home.

Correct AnswerverifiedShow Answer

A newly married couple is having trouble affording a home.What type of mortgage arrangement would reduce the monthly payment as a result of an interest rate subsidy from a builder or real estate developer?

Correct AnswerverifiedShow Answer

Most people do not select a place of residence based on:

Correct AnswerverifiedShow Answer

The amount of mortgage a person is eligible for will be larger when:

Correct AnswerverifiedShow Answer

A ________ is a building that contains exactly two housing units.

Correct AnswerverifiedShow Answer

Which one of these situations creates negative amortization?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which type of repair problem is more likely to be covered by a new homeowner service contract?

Correct AnswerverifiedShow Answer

Which of the following can help you prepare your home for selling?

Correct AnswerverifiedShow Answer

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