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Multiple Choice Quiz
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1

There is no ability to negotiate on the price of a home you are interested in purchasing.
A)True.
B)False.
2

Private mortgage insurance (PMI) is usually required if the down payment on the house is less than 20 percent.
A)True.
B)False.
3

An adjustable rate mortgage often has a lower initial interest rate than a conventional mortgage.
A)True.
B)False.
4

One of the advantages of owning your own home is:
A)The easy ability to move
B)Few or no responsibilities for maintenance
C)The growth in equity while you own the home
D)Lower initial costs
E)All of the above are advantages of owning your own home.
5

Joe Johnson earns $2750 in gross salary per month. He has now debt but has estimated that his monthly payments for taxes and homeowner's insurance on a home would be $170. He wants to get a 15-year mortgage at 8.5% and wants to put down 20% in cash. What is the maximum priced home he can afford? (Refer to the mortgage payment factor table in the textbook.)
A)$60,914
B)$76,142
C)$73,340
D)$91,675
E)None of the above
6

John Gleason has a 30-year mortgage with monthly payments of $790.09 at an interest rate of 6.5%. The amount of the loan is $125,000. How much of John's first payment is principal?
A)$790.09
B)$677.08
C)$8125.00
D)$113.01
E)None of the above
7

A cash advance based on the paid-up value in a home is known as:
A)A second mortgage
B)A reverse mortgage
C)A shared appreciation mortgage
D)A growing equity mortgage
E)None of the above
8

Which of the following would give you an estimate of the fair market value of the home?
A)An appraisal
B)A home inspection
C)The offer price
D)The counter offer
E)None of the above
9

A(n) ____________ is an individually owned unit in a building with several such units.
A)Single family dwelling
B)Condominium
C)Cooperative
D)Duplex
E)None of the above
10

A(n) ____________ is a long term loan on a specific piece of property.
A)Points
B)Earnest money
C)Escrow account
D)Mortgage
E)None of the above





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