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Fin Chapter 7 Quiz 2

Authored by Jesse Everett

Business

12th Grade

Used 5+ times

Fin Chapter 7 Quiz 2
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15 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The legal document that defines the conditions of the rental agreement between the tenant and the landlord is called a:

Mortgage

Security Deposit

Deed

Lease

Answer explanation

The legal document that outlines the terms of the rental agreement between a tenant and a landlord is called a lease. It specifies the rights and responsibilities of both parties, unlike a mortgage or deed.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A _______ is a person who evaluates a house and land for a buyer.

Home Inspector

Real Estate Agent

Tenant

Landlord

Answer explanation

A Home Inspector is specifically trained to evaluate the condition of a house and land for potential buyers, making it the correct choice. Real Estate Agents facilitate sales, while Tenants and Landlords are involved in rental agreements.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A lender may ask a buyer to deposit money in a(n) _______ for paying property taxes.

Home equity loan

Escrow account

Adjustable rate mortgage

Deed

Answer explanation

A lender may require an escrow account to hold funds for property taxes, ensuring they are paid on time. This is a common practice to manage tax payments effectively.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

One of the things a buyer can do to lower the interest rate on a loan is _______.

Take out a second mortgage

Obtain a home equity loan

Have the house appraised

Pay points

Answer explanation

Paying points allows a borrower to prepay interest on the loan, effectively lowering the interest rate. This is a common strategy to reduce monthly payments over the life of the loan.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A _______ is someone who is familiar with the local housing market.

Landlord

Real estate agent

Tenant

Property manager

Homeowner

Answer explanation

A real estate agent is knowledgeable about the local housing market, helping clients buy, sell, or rent properties. Other options like landlord, tenant, property manager, and homeowner may not have the same level of market expertise.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

__________ is the reduction of loan balance through payments made over a period of time.

Amortization

Social Security

Private Mortgage Insurance (PMI)

Stock Market

Answer explanation

Amortization is the process of gradually reducing a loan balance through scheduled payments over time, making it the correct choice for the definition provided.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the term for the initial payment made when buying a house?

Equity

Down payment

Closing cost

Interest rate

Answer explanation

The initial payment made when buying a house is called a down payment. It is a percentage of the home's purchase price and is required to secure a mortgage.

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