Pers Finance 9
Terms in this set (50)
TF Most people select a place of residence based on available financial resources, needs, and lifestyle.
TF Ease of mobility is an advantage of renting.
TF A lease protects the rights of both the tenant and the landlord.
TF A security deposit is a fee charged to help you find an apartment or house to rent.
TF Condominiums involve the purchase of an individual living unit rather than an entire building.
TF Cooperative housing involves the renting of a living unit by the people involved in ownership of the building on a nonprofit basis.
TF Many people believe that location is the most important factor to consider when selecting a home.
TF Current interest rates can affect the price of a home.
TF Negotiating a purchase price for a home usually involves an offer and counteroffers.
TF The amount of the down payment will affect the amount of mortgage a person can afford.
TF Prepaid interest may be a part of a mortgage agreement.
TF An FHA-insured mortgage has less risk than a conventional mortgage for the financial institution
TF Adjustable rate mortgages with a payment cap can result in a situation of negative amortization.
TF A buy down results in reduced mortgage payments during the first few years of the loan as a result of an interest rate subsidy from a builder or real estate developer
TF A balloon mortgage can help a homebuyer when interest rates are high but are expected to come down in the near future.
TF An escrow account is designed to reduce the cost of a mortgage
TF An appraisal refers to the price for which a home has been sold.
TF Home improvements may contribute more to the value of the home than the cost of the renovations.
Renting is more advantageous than buying a home for
lower short-term living costs.
A common opportunity cost associated with renting is
interest lost on the security deposit.
A cost associated with home buying would be
Renting would be most appropriate for people who
have limited funds currently available
The main financial benefit of renting is
lower initial costs.
What does it mean to sublet an apartment?
to obtain another tenant to complete a lease period
The purpose of a security deposit is to
Pay for potential damages
A condominium involves
ownership of an individual living unit
A cooperative housing arrangement involves
Otto Putman rents a living unit as a result of his membership in a nonprofit housing organization. What name is commonly used for this type of housing?
A common financial benefit of home ownership is
increased property value
A common financial risk of home ownership is that
property value may decrease
Which of the following would increase the amount that a person could afford to spend on a home?
increased family income
The most commonly considered factor when selecting a home is the
As Wally Quinten conducts an investigation of property value factors, most real estate experts tell him that ____________ most influences the housing values in an area.
quality of schools
The purpose of zoning laws is to
restrict property use
A real estate agent can best assist a homebuyer by
assisting in getting a mortgage
The purpose of a counteroffer is to
negotiate the purchase price
Earnest money has the purpose of
serving as good faith by a homebuyer.
The amount of mortgage a person is eligible for would be increased by
lower interest rates
What is prepaid interest charged by a mortgage company?
Which of the following is an example of a conventional mortgage?
a fixed rate mortgage
A possible disadvantage of FHA and VA mortgages can be
a longer processing time
Negative amortization is the result of
a higher amount owed on the mortgage
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?
Refinancing of a mortgage is recommended when
interest rates fall
Which of the following is an example of a closing cost?
The purpose of title insurance is to
guarantee the boundaries of the property
Which document is used to transfer ownership of property from one party to another?
Which of the following expenses is paid from an escrow account?
The purpose of an appraisal is to
estimate the current value of a home
If you sell your home without the use of a real estate agent, you should still make use of a