Unit 11 Quiz Review

• $5,250

• $6,050

• $6,825

• $7,350

• $7,825

True or False: Loan to value (LTV) represents the ratio of home loan compared to home value the bank is willing to lend.

• True

• False

• Conventional loan

• ARM loan

• FHA loan

• VA loan

• Fixed loan

When is a home considered under contract?

• When the buyer qualifies for a loan

• When the seller and buyer have signed the offer

• When the buyer signs the seller’s offer

• When the 10-day option period is over

6. Although permanent depreciation is rare, which of the following scenarios would not likely result in permanent depreciation?

• A sudden market crash

• Technological obsolescence

• Natural disaster

• Temporary economic downturn

Which of the following utility bills should a person plan on paying for when buying a house that she most likely did not have to pay for when renting an apartment?

• Electricity

• Natural gas

• Water/sewer/garbage

• Cable/internet

Which of the following is a major difference between fixed and ARM loans?

• Fixed interest rates start higher but never change.

• ARM interest rates start higher but get smaller over the lifespan of the loan.

• Fixed interest rates start lower but require higher credit scores to obtain.

• Both have changing interest rates, but the rates change the same amount every year.

• ARM interest rates start lower but are short-term loans.

True or False: A home’s value can be impacted by the value of houses that are currently for sale in the area.

• True

• False

A house payment can be up to (a)   percent of a person’s monthly gross income to qualify for a loan.

• 25
• 30

• 10
• 50

• The appraisal value of $180,000

• The asking price of $176,000

• The purchase price of $170,000

• The average of the three values

• It depends on the home.