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Chapter 7 Vocabulary

Total questions: 18

Worksheet time: 18mins

Name
Class
Date
1.

What is a lease?

a)

A document outlining a home’s sale price

b)

A legal contract between a landlord and tenant outlining rental terms

c)

A type of home loan

d)

A security deposit agreement

2.

What is a security deposit?

a)

A refundable amount paid to cover damages beyond normal wear and tear

b)

A monthly rent payment

c)

A fee for moving into an apartment

d)

A non-refundable landlord fee

3.

Who is a landlord?

a)

A person who rents an apartment from someone else

b)

The owner of a rental property who leases it to tenants

c)

A real estate agent helping people buy houses

d)

A legal official handling eviction cases

4.

What is a tenant?

a)

A person who owns a rental property

b)

A person who rents an apartment or house from a landlord

c)

A person who provides mortgage loans

d)

A person who manages rental properties

5.

What is an eviction?

a)

The process of finding a new tenant

b)

A legal process of removing a tenant from a rental unit

c)

A security deposit refund

d)

A lease renewal

6.

What is a co-signer?

a)

A person who manages rental properties

b)

A person who signs a lease and is responsible if the tenant fails to pay

c)

A landlord’s legal representative

d)

A tenant’s roommate

7.

What is a pet deposit?

a)

A non-refundable payment for pet food

b)

A fee paid by tenants with pets to cover potential damage

c)

A monthly rent increase for tenants with pets

d)

A tax on pet ownership in rental properties

8.

What is a mortgage?

a)

A contract between a landlord and tenant

b)

A loan used to purchase a home, typically repaid over time

c)

A fee for renting an apartment

d)

A home insurance policy

9.

What is a down payment?

a)

The total cost of a home purchase

b)

An upfront payment made by the buyer, usually a percentage of the home’s price

c)

The monthly mortgage payment

d)

A tax on home purchases

10.

What are closing costs?

a)

Additional expenses paid at the time of home purchase, including loan fees and title insurance

b)

The total cost of a home purchase

c)

The principal loan amount

d)

The interest rate on a mortgage

11.

What is equity in homeownership?

a)

The full cost of a mortgage

b)

The difference between a home's market value and the amount owed on the mortgage

c)

The interest rate on a home loan

d)

A type of home insurance

12.

What is escrow?

a)

A fee paid to a real estate agent

b)

Taxes and insurance added to your mortgage payment

c)

A type of home loan

d)

The down payment on a house

13.

What is a fixed-rate mortgage?

a)

A mortgage where the interest rate stays the same throughout the term

b)

A loan where the interest rate changes frequently

c)

A short-term loan for homebuyers

d)

A loan that only covers the down payment

14.

What is an adjustable-rate mortgage (ARM)?

a)

A loan with an interest rate that stays the same

b)

A mortgage with an interest rate that may change over time based on market conditions

c)

A home loan with no interest

d)

A short-term rental agreement

15.

What is the principal in a loan?

a)

The original amount of money borrowed before interest is added

b)

The monthly mortgage payment

c)

The closing costs on a home purchase

d)

The amount of interest paid over time

16.

What is interest in terms of a loan?

a)

The total loan amount

b)

A refund from a lender

c)

The cost of borrowing money

d)

The amount of a home’s down payment

17.

What is the front-end ratio?

a)

Total monthly expenses divided by monthly gross income and lenders typically prefer this ratio to be 28% or lower.

b)

Total monthly expenses divided by monthly gross income and lenders typically prefer this ratio to be 36% or lower.

c)

Monthly housing expenses divided by monthly gross income and lenders typically prefer this ratio to be 36% or lower.

d)

Monthly housing expenses divided by monthly gross income and lenders typically prefer this ratio to be 28% or lower.

18.

What is the back-end ratio?

a)

Total monthly expenses divided by monthly gross income and lenders typically prefer this ratio to be 28% or lower.

b)

Total monthly expenses divided by monthly gross income and lenders typically prefer this ratio to be 36% or lower.

c)

Monthly housing expenses divided by monthly gross income and lenders typically prefer this ratio to be 36% or lower.

d)

Monthly housing expenses divided by monthly gross income and lenders typically prefer this ratio to be 28% or lower.