Buying a House Review

1. What is an advantage of buying a house, compared to renting?

• Lower overall housing costs
• Freedom to decorate or renovate
• More flexibility to move
• Less financial risk

2. What is the largest expense that someone generally pays at the time they buy a house?

• Property taxes
• Down payment
• Closing costs
• Utilities

3. Amelia has a high credit score. How will that help her buy a home?

• She can apply to decrease her debt-to-income ratio
• She can qualify for a mortgage with a lower interest rate
• She can sell her current house for a higher price
• She can get a higher down payment on her mortgage

4. All of the following are advantages of an FHA loan compared to a conventional mortgage, EXCEPT…

• Qualify with a lower credit score
• Qualify with a higher debt-to-income ratio
• Pay less for a down payment
• Pay less for mortgage insurance

5. What does a down payment assistance program do?

• Help you pay for home maintenance with a tax-free account
• Help you pay for some of the upfront costs of buying a house
• Help you pay for some of your mortgage every month
• Help you pay for fees to end your rental lease early

6. All of the following are advantages of an FHA loan compared to a conventional mortgage, EXCEPT…

• Qualify with a lower credit score
• Qualify with a higher debt-to-income ratio
• Pay less for a down payment
• Pay less for mortgage insurance

7. What is the purpose of mortgage preapproval?

• Getting preapproved gives you access to money to be used for a down payment
• Getting preapproved shows a seller that you’re a serious homebuyer that can secure a mortgage
• Getting preapproved helps increase your credit score so that when you apply for a mortgage you can get the best rates
• Getting preapproved puts you first in line to buy a house if you choose to make an offer

8. Alton is looking for a home. He assesses his needs and wants and decides that he must have at least 3 bedrooms and a fully furnished basement and wants to have a pool and a garage. Which of the four listings below is the BEST fit for Alton’s needs and wants?

• A 4 bedroom home that has no basement but has a pool and a garage
• A 2 bedroom home that has a fully furnished basement, a pool and a garage
• A 3 bedroom home that has a fully furnished basement, a garage, but no pool
• A 5 bedroom home that has a pool but no basement and no garage

9. What does a down payment assistance program do?

• Help you pay for home maintenance with a tax-free account
• Help you pay for some of the upfront costs of buying a house
• Help you pay for some of your mortgage every month
• Help you pay for fees to end your rental lease early

10. Sarah realized that she can’t afford to buy a house right now, but wants to get ready to buy in a few years. All of the following strategies could increase her future housing budget, EXCEPT…

• Reduce her monthly debt payments
• Increase her income
• Find a house with higher HOAs
• Save for a higher down payment