Housing Questions

Housing Questions - SAMPLE TEST QUESTIONS 1 1 Fastidious...

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SAMPLE TEST QUESTIONS 1. Fastidious Frank cleaned his rented apartment from top to bottom before moving out. Thirty days later the landlord had not returned Frank's $100 deposit. How much will the landlord lose if found guilty of willfully not returning the deposit? a. $ 50 plus attorney's fees b. $100 plus attorney's fees c. $150 plus attorney's fees d. $400 plus attorney's fees 2. If your stingy landlord won't fix the leaking roof in your apartment, you should not pay your rent. Just use your rent money to repair the damage yourself. a. True b. False 3. Robert and Rose bought a home in Lubbock, Texas for $96,500. They put $25,000 down. Today, the market value of their house is $105,000 and their outstanding mortgage balance is $70,000. How much equity do Robert and Rose have in their home? Can they get a home equity loan to finance a trip to Cancun? a. $14,000; yes b. $14,000; no c. $35,000; yes d. $70,000; no e. $70,000; yes 4. Ellen wants to purchase a house and is trying to qualify for the loan. Given the following information, what is the highest PITI payment she could afford if the lender requires a 35% Overall (total) Debt Ratio? Total income for the year $36,000 Monthly auto loan payment $ 325 Monthly student loan payment $ 175 a. $ 500 b. $ 550 c. $ 725 d. $1,050 e. $1,200 5. A home buyer who takes out a conventional mortgage generally must buy private mortgage insurance unless she a. promises her first-born child to the bank. b. proves veteran status. c. buys title insurance for both herself and the lender. d. makes a down payment of at least 20%. e. has an excellent credit rating. 6. Which of the following costs can a homeowner deduct (totally or partially) on a primary residence for tax purposes? 1. mortgage principal 2. mortgage interest 3. homeowner's insurance 4. property taxes 5. loan origination fee 6. down payment 7. mortgage discount points a. 2, 4, 5, and 7 b. 1, 2, 4, and 6 c. 1, 3 and 7 d. 2, 3, 4, 6, and 7 1
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7. Charles Grant earns $3,000 per month before taxes, and he wants to take out a mortgage for his dream house. He has the following monthly expenses: $650 Rent $200 Visa card payment $ 50 Clothing $200 School Loan payment $120 Groceries If a lender requires that the buyer's total monthly debt payments not exceed 35% of monthly before-tax income, how much monthly mortgage payment (PITI) will Charles qualify for? a. $ 0 (he can't afford a mortgage) b. $ 480 c. $ 650 d. $ 850 e. $1,050 8. According to your readings, closing costs (not counting discount points) generally run from 2-3% of the loan amount. a. True b. False Use the following information to answer the next five questions. Penny and Cash are considering purchasing a home. They found a house that has a price of $120,000. They plan to put a down payment of 15% on the house. They have a choice between the following two conventional 30- year mortgage loans: Mortgage A (FRM) Mortgage B (ARM) 7% interest with 2 discount points 5% interest with 4 discount points $2,500 closing costs (includes 1%
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This note was uploaded on 11/10/2010 for the course HDF 322 taught by Professor Kitt during the Fall '08 term at University of Texas.

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Housing Questions - SAMPLE TEST QUESTIONS 1 1 Fastidious...

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