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Chapter Quiz
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1
What is a disadvantage to renting versus buying a home?
A)You do not have tax deductions for mortgage interest.
B)You cannot easily move from one place to another.
C)You have more responsibilities.
D)Your utilities are higher.
2
What is usually included in the lease agreement for a rental?
A)The interest rate for the monthly payments.
B)Information about renter's insurance
C)The conditions in which the landlord may enter the rental unit.
D)The name of the previous tenant.
3
What is the difference between a Condominium and a Cooperative property?
A)A condominium is where a person does not own the property but buys stock in the building that gives them the right to live in the unit and a cooperative is where a person buys and owns the unit they live in.
B)A condominium is where the tenant buys the unit and a cooperative is where the tenant rents the unit.
C)A condominium and a cooperative property are two terms for the same thing.
D)A condominium is where a person buys and owns the unit they live in and a cooperative is where a person does not own the property but buys stock in the building that gives them the right to live in the unit.
4
A real estate agent usually provides the following service for buyers aside from showing houses:
A)Providing you with a mortgage.
B)Negotiating the purchase price.
C)Paying your property taxes.
D)Paying your closing costs.
5
In buying a home, earnest money is:
A)The payment sellers give to real estate companies for listing their home.
B)The payment buyers give to real estate agents for their services.
C)A deposit that buyers offer to show they are serious about the purchase.
D)The amount that sellers offer to buyers to entice them to buy the home.
6
The larger the down payment on the purchase of a home:
A)The less likely you will have to carry private mortgage insurance.
B)The higher the interest rate on the mortgage.
C)The less property taxes you have to pay.
D)The shorter the term of your loan.
7
An advantage of an adjustable rate mortgage (ARM) over an fixed rate mortgage is that:
A)You do not need private mortgage insurance with an ARM.
B)You pay off an ARM faster than a fixed rate mortgage.
C)Total interest paid is lower with an ARM.
D)An ARM has a low initial interest rate and thus lower initial monthly payments.
8
Closing costs are:
A)Payments made to the real estate agent for closing the deal on a home.
B)Fees and charges paid to finalize the purchase of a home.
C)Payments made to the seller for expenses incurred in listing the home.
D)Fees paid to the mortgage company for obtaining the loan.
9
The market value of your home is determined primarily by:
A)How much you have invested in home improvements.
B)The government in determining property taxes.
C)Comparable home sales in your neighborhood.
D)The mortgage company in how much they are willing to lend to the buyer.
10
A benefit of using a real estate agent in selling your home is:
A)They can help make sure that potential buyers qualify for a mortgage.
B)They will pay for your closing costs.
C)The buyers pay their commissions.
D)They are lower cost than listing the home yourself.





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