12.2 Purchasing a Home

12.2 Purchasing a Home

Chp 12 Housing Decisions

Open Ended

Why would a person choose to buy a home rather than rent?

Multiple Choice

Approximately ______ of a person's income is spent on housing.

• 1/3

• 1/2

• 1/4

• 1/5

Multiple Choice

Take-home pay is the amount of money you receive after taxes and deductions.

• True

• False

Multiple Choice

The difference between what one owes on a mortgage and the market value of the home is called

• collateral

• equity

• profit

• value

Multiple Choice

Which of the following is an advantage of home ownership?

• greater financial risk

• less mobility

• tax benefits

• less free time

Multiple Choice

For most offers on property, there is usually some _____ between the buyer and seller.

• tension

• negotiation

• animosity

• manipulation

Multiple Choice

The asking price is..

• Amount the seller wishes to receive from the sale of the property.

• Amount the buyer wishes to pay for the property.

Multiple Choice

The ________________ is the price at which something can be bought or sold at a given point in time.

• market value

• asking price

• sale price

• equity

Multiple Choice

Contract between a homebuyer and a seller that includes a description of the real estate, its location, the purchase price, the possession date, and any other conditions and terms of the sale.

• Contingency clause

• Market value

• Purchase agreement

• Negotiations

Multiple Choice

Which of the following is an example of a common contingency clause in a purchase agreement?

• The validity of the agreement depends on the seller’s willingness to lower the asking price.

• The validity of the agreement depends on the buyer’s willingness to keep the property as-is.

• The validity of the agreement depends on the homes ability to pass a home inspection.

• The validity of the agreement depends on the seller’s ability prove he or she is buying another home.

Multiple Choice

What is the function of earnest money?

• Earnest money helps pay for insurance and taxes.

• Earnest money to show that the buyer is serious and prohibits the seller from selling the home to someone else.

• Earnest money is part of the loan application package.

• Earnest money operates as a retainer for real estate attorneys.

Multiple Choice

Type of secured loan used for buying property.

• Credit card

• Debit card

• Mortgage

• Sale price

Multiple Select

What four factors affect the amount of a person’s mortgage payment? (Select 4)

• Size of mortgage

• Interest rate

• Gross income

• Term of the loan

• Down payment

Multiple Choice

________________ is the process of paying back a loan in equal monthly installments.

• purchase agreement

• rental agreement

• amortization

• debt

Multiple Choice

When is PMI required?

• When the loan has a monthly payment of more than 10 percent of the borrower’s monthly income.

• When the loan has a monthly payment of more than 25 percent of the borrower’s monthly income.

• When the borrower has a down payment of less than 50 percent of the purchase price.

• When the borrower has a down payment of less than 20 percent of the purchase price.

Multiple Choice

Fee or settlement charge that must be paid before the sale of a home is final.

• closing costs

• homeowners insurance

• mortgage payment

• appraisal

Multiple Choice

A(n) __________________ is a written estimate of the value of the real estate.

• closing costs

• homeowners insurance

• mortgage payment

• appraisal

Multiple Choice

A legal document that proves ownership of a property is called a(n) __________________.

• contract

• lease

• title

• mortgage

Multiple Choice

The ___________ is the dollar amount assigned to a residence for tax purposes.

• assessed value

• market value

• asking price

• appraisal

Multiple Choice

What will we compare and contrast tomorrow?

• housing options

• mortgage options

• rental options

• down payment options