Topic Test Answers

Two friends decide to rent an apartment and split the cost evenly. They each paid $575 towards the total move in cost of first and last month's rent and a security deposit. If the apartment cost $325 per month to rent, how much was the security deposit? a. $125 b. $250 c. $500 d. $825 Please select the best answer from the choices provided

A couple is required by their lender to have a down payment of 20% of the purchase price of the home they want to buy. If the couple has saved $35,000, what is the most expensive home the couple can afford to buy?a.$63,000b.$140,000c.$175,000d.$210,000

Without buying points, a monthly mortgage payment will be $958. Buying 1 point at closing would reduce the payment to $948.75. If each point costs $1000.00, rounded to the nearest year, how long would it take to break even by buying 1 point? a. 7 years b. 8 years c. 9 years d. 10 years Please select the best answer from the choices provided

The Hendersons have just bought a home that requires some monthly yard maintenance. They are trying to decide if they should hire a professional lawn care service to maintain the property or do it themselves. Below are the costs associated with both options:Professional Service OptionDo-It-Yourself Option$75 for the first month$250 lawnmower $45 per month after initial visit$135 edgerIncludes mowing and edging the lawn, trimming the bushes, and raking the leaves.$69 hedge trimmer $25 rakeHow long would it take before the Hendersons would recover their costs if they chose to do it themselves over the professional service?a.5 monthsb.9 monthsc.10 monthsd.6 months

Chloe lives in an area where she runs the air conditioner during the 4 hottest months of the year. The air conditioner runs for 7 hours per day at a cost of 21 cents per hour. How much does she spend per year on utility bills for the air conditioner?(Assume there are 30 days in each month) a. $705.60 b. $588.00 c. $216.09 d. $176.40 Please select the best answer from the choices provided

Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle’s situation? a. Change to a 15 year fixed loan b. Change the interest to 5.5% c. Change the down payment to 18% down d. None. This is a viable option for Giselle. Please select the best answer from the choices provided

Two friends decide to rent an apartment and split the cost evenly. They each paid $575 towards the total move in cost of first and last month's rent and a security deposit. If the apartment cost $325 per month to rent, how much was the security deposit? a. $125 b. $250 c. $500 d. $825 Please select the best answer from the choices provided

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $4,850.a.$388b.$776c.$970d.$1,358

Which of the following is not an advantage of renting?a.ease of mobilityb.fewer responsibilitiesc.lower initial costsd.restricted lifestyle

Which of the following is not an advantage of renting?a.ease of mobilityb.fewer responsibilitiesc.lower initial costsd.restricted lifestyle

Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex?a.Peter should increase the rent by $200.b.Peter should increase the rent by $60.c.Peter should increase the rent by $10.d.Peter should keep the rent at $900.

Peter wants to buy a duplex with a purchase price of $226,950. Peter can afford a 10% down payment. Peter earns $2,985 a month and wants to spend no more than 10% of his income on his mortgage payment. Peter is going to rent out the other half of the duplex. He thinks that if he charges $900 a month in rent this will cover the remainder of his mortgage payment. Given that Peter has a 30 year mortgage with a fixed rate of 6.25%, how should Peter adjust how much he charges for rent of the other half of the duplex?a.Peter should increase the rent by $200.b.Peter should increase the rent by $60.c.Peter should increase the rent by $10.d.Peter should keep the rent at $900.

A couple is required by their lender to have a down payment of 20% of the purchase price of the home they want to buy. If the couple has saved $35,000, what is the most expensive home the couple can afford to buy?a.$63,000b.$140,000c.$175,000d.$210,000

Giselle wants to buy a condo that has a purchase price of $163,000. Giselle earns $2,986 a month and wants to spend no more than 25% of her income on her mortgage payment. She has saved up $33,000 for a down payment. Giselle is considering the following loan option: 20% down, 30 year at a fixed rate of 6.25%. What modification can be made to this loan to make it a viable option, given Giselle’s situation? a. Change to a 15 year fixed loan b. Change the interest to 5.5% c. Change the down payment to 18% down d. None. This is a viable option for Giselle. Please select the best answer from the choices provided

Which of the following statements are true about WaterSense toilets?a.WaterSense toilets prevent toilet leaksb.WaterSense toilets saved customers 9.3 billion gallons of water in 2008c.WaterSense toilets come with attached float boosterd.WaterSense toilets use about 5-7 gallons of water per flush

In America, a person uses about 100 gallons of water each day, which is equal to 1,600 water-filled drinking glasses. How many water-filled drinking glasses would 281 Americans fill in a weeks time?a.449,600 water-filled glassesb.28,100 water-filled glassesc.3,147,200 water-filled glassesd.196,700 water-filled glasses

The Williams are buying a house that costs $323,000 and can afford a 10% down payment. If the Williams want the lowest monthly payment, which loan option would you recommend?a.15 year fixed, 5% down at a fixed rate of 5.5%b.30 year FHA, 3.5% down at a fixed rate of 6.25%c.30 year fixed, 20% down at a fixed rate of 5.75%d.30 year fixed, 10% down at a fixed rate of 6%

Kim-Su found an apartment that she wants to rent. The rent is $715 per month and there is a security deposit of $465. To move in, Kim-Su must have first month's rent, last month's rent and the security deposit. How much does Kim-Su need to move in? a. $1180 b. $1,645 c. $1,895 d. $2,360 Please select the best answer from the choices provided

Tomaso and three of his friends are splitting the cost to rent a house for $975 a month. The security deposit is $1,500 and there is a cleaning deposit of $325. They must pay first and last month's rent upon moving in.Tomaso has a cat, so he will pay an additional $150 pet deposit that his friends won’t. Approximately how much will Tomaso pay to move in? Round your answer to the nearest dollar. a. $850 b. $944 c. $981 d. $1,094 Please select the best answer from the choices provided

Bessie has an annual salary of $51,360. Each month she has a car payment of $210 and a student loan of $50. If she applies for a home loan, how likely is it Bessie will be approved based on her debt-to-income ratio?a.Very likely; recurring debt is less than what is allowed.b.Somewhat likely; recurring debt is equal to what is allowed.c.Not likely; recurring debt is higher than what is allowed.d.There is not enough information given to determine the answer.

Len and three of his friends decide to rent a house and split the cost evenly. They each paid $725 towards the total move-in cost of first month's rent, last month's rent, and a security deposit. If rent is $800 per month, how much was the security deposit? a. $575 b. $725 c. $1,300 d. $2,100 Please select the best answer from the choices provided

Marco leaves the bathroom faucet running for 22 minutes while he gets ready in the morning. Running the faucet for 5 minutes wastes the same amount of energy as leaving a 60-watt light bulb on for 14 hours. How much energy did Marco waste, in terms of hours which a 60-watt light bulb would remain on?a.7.9 hoursb.61.6 hours c.56.0 hoursd.264.0 hours

Viola has to relocate for her job. She finds a townhome with an option to rent or buy. The conditions of each are shown below. Rent: Move-in costs of $2,380 and monthly payment of $845. Buy: Move-in costs of $5,260 and monthly payment of $785. Viola moves frequently due to her job, but she thinks that she will stay in the area for 4 years. Therefore, she decided to buy. Choose the best evaluation of Viola’s decision. a. Since the costs would be the same over the 4 year period, she will have made a good decision if the property value does not decrease. b. She made a fairly good decision. Buying the townhome will be cheaper over the 4 year period as long as she doesn’t have major repairs to make. c. She made a poor decision if the property value does not increase. Renting the townhome would be cheaper over the 4 year period. d. There is not enough information given to determine which option is best. Please select the best answer from the choices provided

In addition to the following closing costs listed below, the buyer pays a realtor commission that is 3.5% of the loan amount.Closing CostChargeLoan origination$280Title insurance$476Attorney’s fees$675Inspection$200Recording fees$118Escrow$573If the loan amount is $165,000, how much was paid at closing?a.$2,322b.$2,899c.$5,775d.$8,097

Yolanda closed on a 20 year home loan for $83,000. She chooses to buy only 1 point at closing. By buying a point at her closing, Yolanda reduced her monthly payment by $7.63. Based on the fact that Yolanda chose to buy a point at closing, what would you infer is the minimum amount of time that she will own the home?a.6 yearsb.11 yearsc.16 yearsd.20 years

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Which of the following statements are true about WaterSense toilets?a.WaterSense toilets prevent toilet leaksb.WaterSense toilets saved customers 9.3 billion gallons of water in 2008c.WaterSense toilets come with attached float boosterd.WaterSense toilets use about 5-7 gallons of water per flush

Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with an annual income of $86,250. a. $575.00 b. $2,012.50 c. $2,415.00 d. $2,587.50 Please select the best answer from the choices provided

Which of the following ratios is used to determine ones debt-to-income ratio?a.20/28b.20/36c.28/30d.28/36

Aleisha wants to buy a condominium. She has the choice of buying it now or renting it with the option to buy at the end of 4 years. If she rents now, she must pay a deposit of $1,500 and pay rent of $865 per month. If she buys, she would need closing costs and her mortgage payment would be $844 a month for 4 years. How much would her closing costs need to be in order for the cost to buy to be the same as the cost to rent? a. $4,008 b. $2,508 c. $1,521 d. $1,008 Please select the best answer from the choices provided

Budgeting for home maintenance early can save money in the long run. Why save early compared to later, especially if the home is new?a.Home maintenance is unpredictable, but it is important to do it promptly, or it will result in home damage that requires repair. b.Homebuilders are often untrustworthy and do low quality work, requiring home owners to fix or finish a lot of things on their own. c.Homeowners often run into problems soon after purchasing a brand new house.d.Homeowners always have a lot of money after moving into a house they purchased, so they save it for the future.

Which of the following statements is true.I. The higher your interest rate, the higher your monthly mortgage payments.II. The higher your down payment, the higher your monthly mortgage payments.III. A 30 year mortgage fixed at 6% will have smaller payments that a 20 year mortgage fixed at 6%.a.I onlyb.II onlyc.I, II, and IIId.I and III

In which of the following cases would you most likely buy a point when closing on a home loan?a.The monthly payment is reduced by $8 and you plan to sell the home at the end of 3 years.b.The monthly payment is reduced by $10 and you plan to sell the home at the end of 4 years.c.The monthly payment is reduced by $12 and you plan to sell the home at the end of 5 years.d.The monthly payment is reduced by $14 and you plan to sell the home at the end of 7 years.

The Reed and the Merrill families are comparing their utility costs for the past month. The following is a list of the appliances that the families are using to make their comparisons:Reed Family AppliancesMerrill Family AppliancesGas range5 cents per dayElectric range13 cents per dayGas dryer - 1 load per day10 cents per loadGas dryer - 1 load per day10 cents per loadElectric water heater90 cents per dayGas water heater40 cents per dayTypical later model refrigerator16 cents per dayEnergy Star-labeled refrigerator12 cents per dayAssuming that the families use the same appliances in the same way, who spends more to run these appliances in a given 30 day period and by how much?a.The Reed family spends $13.80 more than the Merrill family.b.The Reed family spends $0.46 more than the Merrill family.c.The Merrill family spends $58.80 more than the Reed family.d.The Merrill family spends $18.60 more than the Reed family.

The following closing costs were paid on a home loan.Closing CostChargeLoan origination$320Title insurance$473Attorney’s fees$915Appraisal$415Recording fees$103Escrow$1,318If the closing costs were 5% of the loan amount, how much was the loan amount?a.$62,580b.$70,880c.$74,424d.$177,200

Ronnie wants to lower his utility bills to save money on his monthly expenses. He discovers that if he replaces his water heater with a solar water heater his monthly utility bills can decrease around 50% to 85%. At the end of the year Ronnie wants to calculate the percentage his new solar water heater saved him in the utility bills compared to last year. Ronnie's total utility expenses for this year are $862.40 and last year the utility expenses were $1935.67. What percentage did Ronnie save on his utlility bills by switching to a solar water heater? a. 44.5% b. 97.8% c. 55.4% d. 67.5% Please select the best answer from the choices provided

Mika wants to buy a condominium. He has the choice of buying it now or renting it with the option to buy at the end of 3 years. If he buys now, he could put $0 down, but he must pay closing costs of $7,100. His monthly mortgage payment will be $675. Mika decides to rent instead of buy because it is the cheapest option over the first 3 years. His move-in costs are one month's rent and a $750 security deposit, and he would still need to pay his first month's rent on top of these move-in costs. To the nearest dollar, what is the maximum amount of monthly rent payment he could pay? a. $636 b. $654 c. $828 d. $851 Please select the best answer from the choices provided

Sal and two of his friends rent an apartment together. Their total cost to move in included first month's rent, last month's rent and a security deposit of $1,200. If Sal paid a total of $1,000 to move in, how much is his share of the rent each month? a. $300 b. $450 c. $600 d. $900 Please select the best answer from the choices provided

Marco leaves the bathroom faucet running for 22 minutes while he gets ready in the morning. Running the faucet for 5 minutes wastes the same amount of energy as leaving a 60-watt light bulb on for 14 hours. How much energy did Marco waste, in terms of hours which a 60-watt light bulb would remain on?a.7.9 hoursb.61.6 hours c.56.0 hoursd.264.0 hours

A lender estimates the closing costs on a home loan of $50,000 as listed below. Closing Cost Charge Loan origination $200 Title insurance $530 Attorney’s fees $600 Appraisal $265 Inspection $575 Recording fees $130 Escrow $800 If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not? a. Yes, because the lender estimated 3.08% of the home loan in closing costs which falls between 3 - 5%. b. Yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%. c. No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%. d. No, because the lender estimated 17.7% of the home loan in closing costs which does fall between 3 - 5%. Please select the best answer from the choices provided

How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380?a.$16,290b.$22,800c.$57,000d.$75,000

Bao has been notified by his electric company that his rates are going up on his graduated fee schedule. He currently pays:Standard Use Plan6.5 cents/kWh for the first 600 kWh12 cents/kWh for the next 600 kWhIf his rates go up 1 cent in each category, find how much he will pay if he uses 875 kWh per month. Round to the nearest dollar.a.$72b.$105c.$66d.$81

If the purchase price for a house is $218,500, what is the monthly payment if you put 3.5% down for a 30 year loan with a fixed rate of 6.5%? a. $1,332.73 b. $1,378.19 c. $1,247.54 d. $646.40 Please select the best answer from the choices provided

Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessa’s monthly payments are $1,595.85. How much was Vanessa’s down payment? a. $9,314.45 b. $16,781.25 c. $40,275.00 d. $53,040.00 Please select the best answer from the choices provided

Sammy usually takes a 18 minute shower in the morning. If a 4 minute shower uses an average of 20-40 gallons of water, what is the maximum gallons of water that Sammy could be using in her shower?a.72 gallons of waterb.360 gallons of waterc.90 gallons of waterd.180 gallons of water

Which of the following is a typical cost associated with renting?a.closing costsb.down paymentc.property taxd.security deposit

Vanessa bought a house for $268,500. She has a 30 year mortgage with a fixed rate of 6.25%. Vanessa’s monthly payments are $1,595.85. How much was Vanessa’s down payment? a. $9,314.45 b. $16,781.25 c. $40,275.00 d. $53,040.00 Please select the best answer from the choices provided

Zahra is anxious to save money on her utility bills and knows that changing the temperature of the water when she does laundry can help save money. Right now three-fourths of all her laundry is done with the hotter water. Use the table below to determine how much she currently pays in utility costs for laundry. Assume 1 load of wash per day. Clothes washer w/electric water heaterCost per loadHot wash & warm rinse71 cents per loadWarm wash & cold rinse25 cents per loadIf she cuts down the amount of laundry that she does in hot water to one-half, about how much will she save every year?a.$65 each yearb.$42 each yearc.$23 each yeard.$392 each year

Mrs. Williams estimates that on average her family recycles 12.6 pounds of plastic each month. In a year's time, how much landfill space will Mrs. William's family save if 1 pound of plastic saves 7.4 yards of landfill space?a.932.40 yardsb.93.24 yardsc.1,118.88 yardsd.7.77 yards

Luis wants to buy a home priced at $315,000. He plans to finance this amount less the down payment required. His mortgage payment would then be $2100. Luis has an annual income of $91,500 and $65,000 in savings. Luis has a car payment of $370, a student loan payment of $165 and a credit card payment of $45. Use a 20% down payment and the 28/36 ratio to determine if Luis is eligible for a loan. What would you advise him to do if he is not eligible? a. Luis is eligible for a home loan; he meets all of the requirements. b. Luis is not eligible for a home loan; he should continue to save for a down payment. c. Luis is not eligible for a loan; he should look for a cheaper house. d. Luis is not eligible for a loan; he should reduce his recurring debt. Please select the best answer from the choices provided

Sally must have a total of $2,250 to move in to her new apartment which includes first month's rent, last month's rent, a pet deposit and a security deposit. If the pet deposit is $150 and the security deposit is $750, how much is her rent each month? a. $650 b. $675 c. $750 d. $1,050 Please select the best answer from the choices provided

When 500 phone books are recycled, which of the following statements is false?a.conserves around 9 cubic yards in landfill spaceb.conserves around 17-31 treesc.conserves around 4,077 kilowatt hours of energyd.conserves around 463 gallons of oil

If the purchase price for a house is $309,900, what is the monthly payment if you put 20% down for a 30 year loan with a fixed rate of 6%?a.$729.98b.$912.48c.$1,486.41d.$1,858.01

If the purchase price for a house is $445,500, what is the monthly payment if you put 5% down for a 30 year loan with a fixed rate of 6.25%?a.$2,740.19b.$2,605.87c.$1,314.84d.$1,249.10

Mr. and Mrs. Zeller close on a 20 year home loan for $150,000. The monthly payment with no points is $1,160, but if they buy a point it is $1,150. What might you infer if Mr.and Mrs. Zeller choose not to buy a point? a. They plan to sell the house at the end of 5 years. b. They plan to sell the house at the end of 15 years. c. They plan to sell the house at the end of 20 years. d. They plan to sell the house at the end of 25 years. Please select the best answer from the choices provided

Noah has just purchased a previously owned home. He put $5,000 towards a down payment and took out a $65,000 mortgage. Noah knows that his older home will need maintenance right away and wants to budget enough for this coming year for unexpected expenses. When estimating costs for home repair and maintenance, a good estimate is to budget 1% of the purchase price of a house. What would be a good yearly estimate of repairs and maintenance for Noah’s home?a.$1550b.$700c.$650d.$150

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The Picketts have lived in their house for about 13 years. They like to keep a well-maintained property and have noticed that the paint on the exterior of their house is starting to peel. They get two bids for painting services from two different contractors. Based on the fee schedule below, which option would be the cheapest and by how much?Handyman’s Paint ServicePainting Plus Service$2250 all supplies and labor included for a 2-day jobTwo day job estimate $300 preparation work $765 labor per day $225 paint and suppliesa.Painting Plus Service would be cheaper by $960b.Painting Plus Service would be cheaper by $195c.Handyman’s Paint Service would be cheaper by $105d.Handyman’s Paint Service would be cheaper by $195

The Baum and the Freeman families are comparing their electric bills for the past month. The Baum family is on a standard use plan and the Freeman family is on an interval use plan. Each family’s usage is listed on the chart below:Standard Use PlanInterval Use Plan8.5 cents/kWh for the first 400 kWh12 cents/kWh for the next 400 kWh14.5 cents/kWh for anything over 800 kWhOn-peak hours - 13 cents/kWhOff-peak hours - 2 cents/kWhBoth families use 1250 kWh for the given 30 day period. The Freeman family uses 400 kWh during on-peak hours and 850 during off-peak hours. Which family ends up paying more for their utilities? How much more?a.The Freeman family pays $260.83 more than the Baum family.b.The Freeman family pays $250.00 more than the Baum family.c.The Baum family pays $69.00 more than the Freeman family.d.The Baum family pays $78.25 more than the Freeman family.

In what range do the closing costs on a home loan typically fall?a.1% to 3%b.3% to 5%c.5% to 7%d.7% to 10%

A golf course in Phoenix, Arizona, uses an average of 80 million gallons of water daily for irrigation. An average family of four (also living in Phoenix, AZ) uses 325,851 gallons of water per year. Rounded to the nearest ten, how many families of four can one golf course provide water for?

Which of the following is a typical cost associated with renting?a.closing costsb.down paymentc.property taxd.security deposit

Mika wants to buy a condominium. He has the choice of buying it now or renting it with the option to buy at the end of 3 years. If he buys now, he could put $0 down, but he must pay closing costs of $7,100. His monthly mortgage payment will be $675. Mika decides to rent instead of buy because it is the cheapest option over the first 3 years. His move-in costs are one month's rent and a $750 security deposit, and he would still need to pay his first month's rent on top of these move-in costs. To the nearest dollar, what is the maximum amount of monthly rent payment he could pay? a. $636 b. $654 c. $828 d. $851 Please select the best answer from the choices provided

Using the standard 28/36 guidelines, if the maximum monthly mortgage payment allowed for someone applying for a home loan is $1,085, what is their annual income?a.$36,167b.$46,500c.$65,100d.$162,750

Using the standard 28/36 guidelines, what is the maximum mortgage payment allowed for someone with an annual salary of $73,025?a.$2,190.75b.$2,044.70c.$1,703.92d.$1,217.08

Which of the following would least likely be used to determine your eligibility for a home loan?a.credit history reportb.current utility billsc.recurring debt totald.savings account balance

A lender estimates the closing costs on a home loan will be 3% of the loan amount of $180,000. The actual closing costs are listed below. Closing Cost Charge Loan origination $345 Title insurance $600 Attorney's fees $1,350 Appraisal $480 Inspection $550 Recording fees $175 Escrow $1,900 Evaluate the lender's good faith estimate. a. The lender made an excellent estimate; it was equal to the actual closing costs. b. The lender made a very good estimate; it was within 0.25% of the actual closing costs. c. The lender made a fairly good estimate; it was between 0.25% and 0.5% of the actual closing costs. d. The lender made a poor estimate; it was higher than 0.5% of the actual closing costs. Please select the best answer from the choices provided

When renting an apartment, in addition to the first month's rent, the amount to move-in often requires the last month's rent as well as a security deposit. The rent is $725 per month and the security deposit is $900. How much money must be paid to the apartment management to be able to live in the apartment the first year? Assume that the renters moved out at the end of the first year. a. $9,425 b. $9,600 c. $10,325 d. $11,050 Please select the best answer from the choices provided

What is not an example of a cost related to home ownership?a.property taxesb.maintenancec.repairsd.security deposit

The average national utility price is $270.48. Over a 6-month period, what is the average utility price in Orlando? How does this compare with the national average? a. $370.60; higher than the national average b. $292.17; higher than the national average c. $38.35; lower than the national average d. $308.83; higher than the national average Please select the best answer from the choices provided

The national average utility cost is $270.48 per month. If the average phone bill is 12.6% of the total amount and the average utility cost for Dallas is $326, what would be the cost of a typical Dallas home phone bill?a.$48.30b.$55.52c.$34.08d.$41.08

When buying a home, the lender may hold money in an escrow account to pay _____.a.attorney’s feesb.origination feesc.property taxesd.title insurance

Which of the following would least likely have a negative impact on determining eligibility for a home loan?a.increasing a credit card limitb.losing money in investmentsc.making late car paymentsd.taking a new job with higher pay

The Williams are buying a house that costs $323,000 and can afford a 10% down payment. If the Williams want the lowest monthly payment, which loan option would you recommend?a.15 year fixed, 5% down at a fixed rate of 5.5%b.30 year FHA, 3.5% down at a fixed rate of 6.25%c.30 year fixed, 20% down at a fixed rate of 5.75%d.30 year fixed, 10% down at a fixed rate of 6%

A lender estimates the closing costs on a home loan of $50,000 as listed below. Closing Cost Charge Loan origination $200 Title insurance $530 Attorney’s fees $600 Appraisal $265 Inspection $575 Recording fees $130 Escrow $800 If the lender's good faith estimates are accurate, are they a reasonable amount for closing costs? Why or why not? a. Yes, because the lender estimated 3.08% of the home loan in closing costs which falls between 3 - 5%. b. Yes, because the lender estimated 4.6% of the home loan in closing costs which does not fall between 3 - 5%. c. No, because the lender estimated 6.2% of the home loan in closing costs which does not fall between 3 - 5%. d. No, because the lender estimated 17.7% of the home loan in closing costs which does fall between 3 - 5%. Please select the best answer from the choices provided

Which of the following is not an advantage of buying a home?

Karina bought a townhouse for $199,900. She has a 30 year mortgage with a fixed rate of 5.5%. Karina’s monthly payments are $998.08. What percent of the purchase price was Karina’s down payment?a.7%b.12%c.15%d.18%

Aleisha wants to buy a condominium. She has the choice of buying it now or renting it with the option to buy at the end of 4 years. If she rents now, she must pay a deposit of $1,500 and pay rent of $865 per month. If she buys, she would need closing costs and her mortgage payment would be $844 a month for 4 years. How much would her closing costs need to be in order for the cost to buy to be the same as the cost to rent? a. $4,008 b. $2,508 c. $1,521 d. $1,008 Please select the best answer from the choices provided

Housing expenses are commonly referred to as PITI. What does PITI stand for?a.principal, income, taxes, investmentb.payment, investment, terms, insurancec.payment, interest, terms, incomed.principal, interest, taxes, insurance

When you are purchasing green cleaning products, which of the following informative information should not grab your attention? a. performance b. ingredients c. effects on health d. celebrity endorsements Please select the best answer from the choices provided

Which of the following refers to the cost associated with determining the condition of the property when buying a home?a.appraisalb.discountc.inspectiond.origination

A lender estimates that the closing costs on a $293,600 home loan will be $11,010. The actual closing costs were 3.25% of the loan amount. Determine if the closing costs were higher or lower than the estimate and by what percent?a.higher by 0.25%b.higher by 0.5%c.lower by 0.25%d.lower by 0.5%

In America, a person uses about 100 gallons of water each day, which is equal to 1,600 water-filled drinking glasses. How many water-filled drinking glasses would 281 Americans fill in a weeks time?a.449,600 water-filled glassesb.28,100 water-filled glassesc.3,147,200 water-filled glassesd.196,700 water-filled glasses

Limited mobility may be a disadvantage of buying because the home is _____.a.difficult to get around inb.difficult to sellc.expensive to repaird.far away from work

The climate in which Jonah lives is mild all year long except during the hotter summer months. For 3 months out of the year, Jonah needs to use 4 portable fans to cool his home. If the electricity to use one fan costs 1 cent per hour and each fan is on for about 96 hours per month, what is his total electricity cost for the fans during one year? a.$6.72b.$3.84c.$11.52d.$2.88

Which of these statements is most accurate regarding mortgage payments through the life of your loan?a.At the beginning of your loan, your payments are covering mostly interest. At the end of your loan, your payments are covering mostly principal.b.The amount for your mortgage payments will decline over the life of your loan.c.The amount of interest paid per mortgage payment will remain the same over the life of your loan.d.The amount of principal paid per mortgage payment will decrease over the life of your loan.

Samantha is trying to determine how she can save money by cutting her electricity bill. She is currently on a standard use plan for electricity and pays 8.5 cents per kWh. She keeps track of when she uses electricity and is thinking about switching to an interval use plan for electricity which costs 2 cents per kWh for off-peak use and 13 cents per kWh for on-peak use. Off-peak hours are from 8PM - 8AM and on-peak hours are from 8AM - 8PM. Below is the chart of her electricity usage:Samantha’s Electricity Usage Per Month1100 kWh between 8PM and 8AM800 kWh between 8AM and 8PMExplain and justify which plan would best suit her needs.a.Samantha should not switch to the interval use plan, which would cost $126.00 more per month.b.Samantha should switch to the interval use plan, which would save her $126.00 per month.c.Samantha should switch to the interval use plan, which would save her $35.50 per month.d.Samantha should not switch to the interval use plan, which would cost $35.50 more per month.

You work for a lender that requires a 20% down payment and uses the standard debt-to-income ratio to determine a person’s eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan. Person A Person B Person C Person D home value $175,000 $200,000 $220,000 $250,000 income $51,000 $58,000 $63,000 $67,000 savings $35,000 $40,000 $42,000 $50,000 recurring debt $350 $250 $200 $450 a. Person A b. Person B c. Person C d. Person D Please select the best answer from the choices provided

You work for a lending institution and are tasked with whether or not to approve a home loan, using the standard 28/36 ratio. The loan application is for $230,000. You see that the applicant has an annual salary of $83,000. The applicant also has a car payment of $315, a student loan of $140 and a boat loan of $96. How likely are you to approve the loan? a. Very likely; recurring debt is considerably less than what is allowed. b. Somewhat likely; recurring debt is very close to what is allowed. c. Not likely; recurring debt is higher than what is allowed. d. There is not enough information given to determine the answer. Please select the best answer from the choices provided

Which of the following statements is true?a.A 30 year fixed mortgage will always result in the lowest payment.b.You must have at least a 20% down payment to get a competitive interest rate.c.The lower your interest rate is, the lower your monthly payments are.d.The faster you pay off your mortgage, the lower your monthly payments are.

Which of the following is not an advantage of buying a home?

Bryce has heard that gas appliances are cheaper to use and can lower utility costs. He is interested in purchasing a new gas stove for his kitchen to replace his electric stove. Assuming that the stove gets used one hour per day, use the following chart to determine how much Bryce will save each year in utility costs by purchasing the gas appliance.Electric Stove13 cents per hourGas Stove5 cents per houra.$29.75b.$18.25c.$29.20d.$47.45

Why does it take 30 years to pay off $150,000 loan, even though you pay $1000 a month? a. Sales tax is really high for home mortgages, and that is why monthly payments are much higher than just paying off principal. b. Banks trick investors into paying more money monthly so they can pocket the rest. c. Most home owners are expected to miss about half of their payments, so banks take this into account when determining the term of the loan. d. Even though the principal would be paid off in just over 10 years, it costs the bank a lot of money to fund the loan. The rest of the loan is paid out in interest. Please select the best answer from the choices provided

The climate in which Jonah lives is mild all year long except during the hotter summer months. For 3 months out of the year, Jonah needs to use 4 portable fans to cool his home. If the electricity to use one fan costs 1 cent per hour and each fan is on for about 96 hours per month, what is his total electricity cost for the fans during one year? a.$6.72b.$3.84c.$11.52d.$2.88

Mr. and Mrs. Lorenzo want to buy a home valued at $213,500. If they have 18% of this amount saved for a down payment, how much have they saved?a.$384.30b.$3,843.00c.$38,043.00d.$38,430.00

Mr. and Mrs. Donahue want to buy a home valued at $365,000. If they have 21.5% of this amount saved for a down payment, how much will their home loan be?a.$78,475b.$286,525c.$341,275d.$357,153

Isaiah is trying to decide if the interval use plan is better than the standard use plan for his electricity consumption. Calculate the monthly costs of both plans if he uses 1,275 kWh of electricity per month with 575 kWh on-peak usage and the rest off-peak usage.Standard Use PlanInterval Use Plan7.5 cents/kWh for the first 400 kWh10 cents/kWh for anything over 400 kWhOn-peak hours - 15 cents/kWhOff-peak hours - 3 cents/kWha.standard use plan - $117.50; interval use plan - $107.25b.standard use plan - $87.50; interval use plan - $86.25c.standard use plan - $117.50; interval use plan - $86.25d.standard use plan - $87.50; interval use plan - $107.25

What is a financial risk of being a homeowner?a.The home may be difficult to sell.b.The home may need repairs.c.The home may decrease in value.d.The home may have taxes.

Which term is defined as a fee charged for the use of money?a.interestb.down paymentc.principald.default

Which of the following ratios is used to determine ones debt-to-income ratio?a.20/28b.20/36c.28/30d.28/36

Which of the following is not true about a loan discount point?a.A point is purchased at the time of closing.b.A point is purchased for 1% of the loan amount.c.A point reduces the interest rate by 1%.d.A point bought will reduce the monthly mortgage payment.

You work for a lender that requires a 20% down payment and uses the standard debt-to-income ratio to determine a person’s eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan. Person A Person B Person C Person D home value $175,000 $200,000 $220,000 $250,000 income $51,000 $58,000 $63,000 $67,000 savings $35,000 $40,000 $42,000 $50,000 recurring debt $350 $250 $200 $450 a. Person A b. Person B c. Person C d. Person D Please select the best answer from the choices provided

On average 113,204 aluminum cans are recycled in a minute. Approximately how many cans will be recycled in 16 days? (Express your answer in scientific notation.) a. aluminum cans b. aluminum cans c. aluminum cans d. aluminum cans Please select the best answer from the choices provided

What may be a concern if you have an adjustable rate mortgage (ARM)?a.After the initial fixed rate period, your rate may increase.b.Your payment will constantly change during your initial fixed rate period.c.After the initial fixed rate period, your rate may decrease.d.A portion of your rate pays the commission of your mortgage broker.

Why are closing costs a one time fee?a.Payment of closing costs is required because it is a sign to the lending institution that the investor has every intention of making payments on time.b.If closing costs were paid over time, they would most likely be forgotten and never paid off.c.Most home buyers pay for their houses in full, and consequently pay for the closing costs in full as well.d.The closing costs cover titles, taxes, and realtor costs. After closing, the only monetary obligation is to the lending party.

In what range do the closing costs on a home loan typically fall?a.1% to 3%b.3% to 5%c.5% to 7%d.7% to 10%