Personal Finance Chapter 9 Review

Home improvements may contribute more to the value of the home than the cost of renovations.

• True

• False

The purpose of title insurance is to ________

• transfer ownership of the property

• reduce the chance of a decrease in property value

• guarantee the boundaries of the property

• protect an owner from changes in mortgage interest rates

• cover the closing costs of a real estate transaction

Real estate agents will provide you with services using an hourly rate.

• True

• False

Which of the following is typically excluded from a lease agreement?

• restrictions regarding specific activities (remodeling etc.)

• a list of utilities, appliances, etc. that are included in the rental amount

• the conditions under which the landlord

• the penalty for missing rental payments

• the tenant's right to sublet the rental unit

The amount of the down payment will affect the amount of mortgage a person can afford.

• True

• False

A cooperative housing arrangement involves ______.

• housing units owned by a real estate developer

• individual ownership of a living unit in a building

• government-supported rental units

• factory built and on-site assembly

• a nonprofit organization

Which of the following would increase the speed of equity growth for a homebuyer?

• making a down payment of 10 percent or 20 percent

• obtaining a mortgage interest rate of 9 percent instead of 8 percent

• obtaining a 15 year mortgage instead of a 30 year mortgage

• making larger deposits to the escrow account

• making smaller deposits to the escrow account

At the time a purchase agreement for a home is signed, the "earnest" money has the purpose of _______.

• serving as evidence of serious interest

• paying a mortgage application fee

• paying real estate property taxes

• paying the real estate agent's commission

• reducing the mortgage interest rate.

The most commonly considered factor when selecting a home is the _______.

• current interest rates

• location of the home

• size of the home

• local zoning laws

• condition of the home

The amount of mortgage a person is eligible for would be increased by ______.

• lower interest rates

• high debt obligations

• higher interest rates

• a low family income

• a lower down payment