Ch 12 Assessment

Question 1

Mortgage in which the interest rate changes periodically (i.e. annually); a way for banks to transfer the risk of higher interest rates to the consumer

Answer 1

Adjustable Rate Mortgage (ARM)

Question 2

The value of a piece of property over and above any mortgage or liabilities related to it

Answer 2

Equity

Question 3

An interest rate that does not change over time

Answer 3

Fixed Rate

Question 4

An asset rising in value, which helps one to keep up with the rising cost of inFa-tion; real estate can be a great inFation hedge

Answer 4

Inflation Hedge

Question 5

Computer program used by real estate agents to search frequently updated listings of available prop-erties in order to find prospective homes for their clients

Answer 5

Multiple Listings Service (MLS)

Question 6

Loan secured by the collateral of real estate property, which obligates the borrower to make a predetermined series of payments

Answer 6

Mortgage

Question 7

Original amount of money invested, excluding any interest or dividends; also called the face value of a loan

Answer 7

Principal

Question 8

A real estate professional who receives a com-mission for arranging and facilitating the sale of a property for a buyer or a seller. Also referred to as a real estate broker

Answer 8

Real Estate Agent

Question 9

The appearance of a home from the street

Answer 9

Curb Appeal

Question 10

An agreement that ensures the structural soundness of a home

Answer 10

Home Warranty

Question 11

A survey that shows where one’s property lines begin and end

Answer 11

Land Survey

Question 12

An increase in value

Answer 12

Appreciation

Question 13

An individual who inspects homes for defects prior to the closing of a home sale to protect the buyer or lender’s investment

Answer 13

Home Inspector

Question 14

Vacation property in which a company sells a small segment of time to a customer; the costs of running the property are shared among all of the owners who bought into the timeshare

Answer 14

Timeshare

Question 15

Used to release the home equity in a property. The homeowner either makes no payments and the interest is added to the lien of the property, or the homeowner receives monthly payments thereby increasing the debt each month.

Answer 15

Reverse Mortgage

Question 16

Biweekly mortgage payments that allow for one additional payment on your mortgage annually

Answer 16

Accelerated Payment

Question 17

Mortgage obtained through the Federal National Mortgage Association (FNMA), which insures against default; generally includes a down payment of 5–20% or more

Answer 17

Conventional Loan

Question 18

Policy paid by the mortgage borrower that protects the lender against loss resulting from default on a mortgage loan

Answer 18

Private Mortgage Insurance (PMI)

Question 19

Type of loan that is issued by the Federal Housing Authority; geared toward providing a mortgage to moderate- and low- income families that would not otherwise be able to afford a mortgage

Answer 19

Federal Housing Administration (FHA) Loan

Question 20

Type of mortgage in which the existing owner acts as the mortgage holder; payments are made to the owner rather than to a mortgage company or bank

Answer 20

Owner Financing

Question 21

Baby Step 1

Answer 21

1000 in emergency fund

Question 22

Baby Step 2

Answer 22

debt snowball

Question 23

Baby Step 3

Answer 23

3-6 months of expenses in savings

Question 24

Baby Step 4

Answer 24

`invest 15% of your household income into Roth IRA and retirement plans

Question 25

Baby Step 5

Answer 25

college funding for kids

Question 26

Baby Step 6

Answer 26

Pay off your home early

Question 27

Baby Step 7

Answer 27

Build wealth and give

Question 28

When selling a home you should think like a ...

Answer 28

retailer

Question 29

True or False: The return on investment of fix-up dollars is small.

Answer 29

False, it's enormous

Question 30

When selling your home, make sure it is listed on the

Answer 30

internet

Question 31

True or False: The best real estate agents are worth more than they cost.

Answer 31

True

Question 32

True or False: Exposure through the Multiple LIstings Service is worth it

Answer 32

True

Question 33

You should always ___________ agents

Answer 33

interview

Question 34

Offering a home warranty will typically not __________

Answer 34

make a sale

Question 35

Why is home ownership a great investment?

Answer 35

It is a forced savings plan It is an inflation hedge It grows virtually tax-free

Question 36

Always get a _________ if buying more than a standard subdivision lot

Answer 36

land survey

Question 37

___________ are an "opinion of value"

Answer 37

appraisals

Question 38

Do not buy...

Answer 38

trailers, mobile homes, timeshares

Question 39

The best mortgage is the _____% down plan

Answer 39

100

Question 40

Get a payment of no more than ____% of your take-home pay on a ____-year fixed-rate loan, with at least ____% down.

Answer 40

25, 15, 10

Question 41

True or False: Interest only loans are a good idea

Answer 41

False, bad idea

Question 42

Horrible Mortgages Options:

Answer 42

ARMS, Reverse Mortgages, Accelerated or Biweekly Payoff, Tax Advantage of a Mortgage

Question 43

PMI stands for

Answer 43

Private Mortgage Insurance

Question 44

u are done

Answer 44

yay