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Personal Finance Study Set 15

Business

Quiz 9 :

The Housing Decision: Factors and Finances

Quiz 9 :

The Housing Decision: Factors and Finances

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Real estate advisors suggest a price-to-rent ratio of 25 or lower when you buy to possibly avoid a lower home value after your purchase.
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True False
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Answer:

False

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Renting would be most appropriate for people who:
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Multiple Choice
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Answer:

C

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Kate plans to rent instead of buying her housing.Which advantage of renting will she realize?
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Multiple Choice
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Answer:

B

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An escrow account is designed to reduce the cost of a mortgage.
True False
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Prepaid interest may be charged by the lender for a lower mortgage rate.
True False
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Real estate professionals believe that location is the most important factor to consider when selecting a home.
True False
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An appraisal refers to the price for which a home has been sold.
True False
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An FHA fixed-rate mortgage has low down payment requirements and is fully assumable with no prepayment penalties.
True False
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Negotiating a purchase price for a home can involve an offer and a counteroffer.
True False
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A payment cap keeps the payments on an adjustable-rate mortgage at a given level or limits the amount to which those payments can rise.
True False
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Amortization refers to changes in the monthly payment for a variable rate mortgage.
True False
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A deed is the document that transfers ownership of the property from one party to another.
True False
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Home improvements may or may not increase the selling price of the home.
True False
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A major expense associated with home ownership would be:
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The amount of cash available for a down payment will affect the size of the mortgage loan needed to purchase a home.
True False
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The purpose of a rate cap in an adjustable-rate mortgage is to limit the amount by which the interest rate can increase or decrease during the ARM term.
True False
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A lease provides protection to both the tenant and the landlord.
True False
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Condominiums involve the purchase of an individual housing unit in a building rather than an entire building.
True False
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Renting is more advantageous than buying a home when you are seeking:
Multiple Choice
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A common cost associated with renting is:
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