Question 1

Contrast the advantages of renting and buying.

Accepted Answer

The answer of Contrast the advantages of renting and buying....

Question 2

Which of the following is NOT correct regarding real estate agents?

Accepted Answer

Real estate agents typically conduct showings of the property themselves, as part of their services.

Question 3

Crystal is looking for a new apartment.What are her total annual costs associated with renting?

Accepted Answer

The total cost equals Total annual rent payments + Insurance + Interest lost = ($1,000 × 12 months) + $250 + $20 = $12,270.

Question 4

Given the information here,what is the total cost of renting per year?

Accepted Answer

The total cost equals Rent payments + Insurance + Interest lost = $14,400 + $300 + $10 = $14,710.

Question 5

Lonnie wanted to sell his house but didn't know what price to ask.He should consider all of the following except

Accepted Answer

Lonnie's original cost is not relevant to determining the current market value of his home. The other factors listed are all important considerations in determining an appropriate asking price.

Question 6

If you have a $150,000 30-year 5% mortgage,how much of your first monthly payment of $805.50 would go toward principal?

Accepted Answer

Interest = Principal × Monthly interest rate × Time = $150,000 × 5% × 1 month/12 months = $625.00.Total payment - Interest = Principal = $805.50 - $625.00 = $180.50.

Question 7

Franklin wants to sell his house himself.Which of the following is NOT correct about his sale?

Accepted Answer

Franklin should not show the house only when he is home alone as it can be dangerous for him. It is important for him to ensure safety and security during the sales process. He should consider scheduling viewings with potential buyers at specific times when he can have someone else present or arrange for an agent to handle the viewings.

Question 8

If you are selling your house by owner,you should still enlist the assistance of

Accepted Answer

Selling a house involves legal matters that require expertise and experience, so it's best to enlist the assistance of a lawyer or title company to help with the contract, closing, and other legal matters. While it may be helpful to have a real estate agent help with the closing, it's not necessary, and relying on a family member to aid with legal issues may not be the best course of action.

Question 9

Home buyers have many alternatives.List three types of housing available to home buyers.

Accepted Answer

The answer of Home buyers have many alternatives.List three types...

Question 10

Given the information here,what is the annual cost of owning?

Accepted Answer

The total cost equals (Mortgage payments + Property taxes + Home owner's insurance + Maintenance and repairs) - (Growth in equity + Tax savings + Annual appreciation) ={$19,200 + $4,800 + $1,200 + (1% × $300,000)} - {$3,000 + $2,800 + (1.5% × $300,000)} = $28,200 - $10,300 = $17,900.

Question 11

Jordan earns an annual salary of $45,000.If a lender uses 33% of monthly gross income as a guideline for the maximum PITI (principal,interest,taxes,and insurance),what is the maximum mortgage that Jordan can apply for?

Accepted Answer

Jordan's monthly gross income = $45,000/12 = $3,750.If 33% of the monthly gross income is allowed for his PITI, his maximum will be $3,750 × 33% = $1,237.50.

Question 12

Carrie bought a house five years ago for $150,000.At that time she borrowed $140,000 from her bank.The house is now worth $162,000.Her PMI will automatically be dropped when her mortgage balance drops to

Accepted Answer

Per the Homeowners Protection Act, PMI must be terminated automatically when a home owner's equity reaches 22% of the property value at the time the mortgage was executed. The mortgage would then be $150,000 × (1 - .22) = $117,000.

Question 13

Brett bought a house five years ago for $150,000.At that time he borrowed $140,000 from his bank.The house is now worth $162,000.If he wants to stop paying his private mortgage insurance,he can request termination of PMI.The current value of his mortgage must be no higher than

Accepted Answer

Once his equity has increased to 22% of the current market value, he can request that PMI is dropped. He may request termination of PMI when his mortgage balance reaches $126,360 {$162,000 × (1 - .22)}.

Question 14

Walt has decided to sell the home he has lived in for 50 years.The house has two bedrooms on the first floor,a finished basement,and a finished attic with a low ceiling.To prepare his home for sale,he should

Accepted Answer

To prepare the house for sale, Walt should take steps to make the house appear bright and large. This might include decluttering the space, painting walls a neutral color, and ensuring that all light fixtures work properly. Making the house appear larger and brighter can be a key selling point, as it will help potential buyers envision themselves living in the space.

Question 15

Why should a tenant purchase renter's insurance?

Accepted Answer

The answer of Why should a tenant purchase renter's insurance?...

Question 16

If you have a $150,000 30-year 5% mortgage,how much of your first monthly payment of $805.50 would go toward interest?

Accepted Answer

Interest = Principal × Monthly interest rate × Time = $150,000 × 5% × 1 month/12 months = $625.00.

Question 17

List five items that appear in a lease.

Accepted Answer

The answer of List five items that appear in a...

Question 18

Which of the following is NOT correct?

Accepted Answer

Caryn's suggestion to open drapes but keep lights turned off to conserve energy will not directly affect the selling price of her property, but it will give it a positive image and potentially attract environmentally conscious buyers. The other choices all describe actions that could potentially increase the selling price or provide cost savings.

Question 19

What are two advantages of renting?

Accepted Answer

The answer of What are two advantages of renting?...

Question 20

What are the financial benefits of home ownership?

Accepted Answer

The answer of What are the financial benefits of home...

Quiz 7: Selecting and Financing Housing