Ch.11 L. 4 Home buying

What happens at a real estate closing?

• a) A ceremonial ribbon-cutting to welcome you to the neighborhood

• b) The finalization of the home purchase, including signing documents and transferring funds

• c) A race between the buyer and seller to see who gets to keep the house

• d) A party with a bouncy castle and cotton candy machine

What is the purpose of a home warranty?

• a) To guarantee your home will be ghost-free

• b) To provide repair or replacement coverage for certain home systems and appliances

• c) To ensure your home will always have perfect weather

• d) To give your home a starring role in a blockbuster movie

What is a contingency in a real estate contract?

• a) A backup plan in case your dream home is actually a secret superhero hideout

• b) A condition that must be met for a home purchase to proceed, like a quest in a video game

• c) A type of plant used in landscaping

• d) A special dance performed at the closing ceremony

What is private mortgage insurance (PMI)?

• a) A top-secret insurance policy only available to spies

• b) Insurance that protects the homeowner from alien invasions

• c) An insurance policy that protects the lender if the borrower defaults on the loan, typically required when the down payment is less than 20%

• d) A subscription service for exclusive mortgage advice

What is the difference between a pre-qualification and a pre-approval for a mortgage?

• a) One requires a magic wand, the other a crystal ball

• b) Pre-qualification is an initial evaluation of creditworthiness, while pre-approval is a more in-depth review and a conditional commitment from the lender

• c) Pre-qualification is a type of ice cream flavor, while pre-approval is a candy bar

• d) Pre-qualification is a new dance move, while pre-approval is a viral video challenge

What is earnest money?

• a) A board game about real estate investing

• b) A deposit to show a seller that a buyer is serious about purchasing a home

• c) A monthly subscription service for home improvement products

• d) A type of currency used only in the world of virtual reality

What does an inspector do during the home buying process?

• a) Check for hidden treasure in the walls

• b) Evaluate the condition of a home, like a property detective

• c) Provide interior design advice

• d) Organize a housewarming party for the new owners

What is the role of an appraiser in the home buying process?

• a) To determine the home's value, like a treasure hunter

• b) To decide the best paint color for the living room

• c) To pick out new furniture for the home

• d) To provide complimentary cookies at open houses

What is the debt-to-income ratio?

• a) A financial fitness test for your pet

• b) The ratio of pizza slices consumed to slices left in the box

• c) A measure used by lenders to assess a borrower's ability to repay a loan

• d) A new dance move that's all the rage

Which of the following is a benefit of homeownership?

• a) Building equity like a financial sandcastle

• b) Having a personal zoo in your backyard

• c) Unlimited access to a neighbor's pool

• d) Free popcorn at every movie night