Housing Decisions and Financial Considerations Quiz
Test your knowledge on housing economics. Explore factors influencing housing choices, mortgage options, and ownership advantages.
#1
Which of the following is not a factor to consider when deciding to rent or buy a home?
Monthly mortgage payments
Property taxes
Current fashion trends
Maintenance costs
#2
What is the recommended percentage of your income to spend on housing expenses?
Less than 20%
Between 20% and 30%
Between 30% and 40%
More than 40%
#3
What is the purpose of a home inspection in the home buying process?
To estimate the value of the property
To determine the need for repairs
To finalize the mortgage approval
To verify the ownership of the property
#4
Which type of mortgage has a fixed interest rate for the life of the loan?
Adjustable-rate mortgage
Balloon mortgage
FHA loan
Fixed-rate mortgage
#5
What is the primary purpose of a home appraisal?
To determine the size of the home
To estimate the market value of the home
To assess the energy efficiency of the home
To evaluate the interior design of the home
#6
Which of the following is a potential benefit of renting a home?
Building equity
Stable monthly payments
Flexibility to move
Tax deductions
#7
What is a common closing cost associated with buying a home?
Property taxes
Home inspection fees
Homeowner's insurance
Loan origination fees
#8
What is the 28/36 rule in mortgage lending?
A guideline for the maximum percentage of income that should be spent on housing expenses
A rule stating that only individuals aged 28 to 36 can apply for a mortgage
A regulation that limits the amount of debt a borrower can have relative to their income
A law that requires lenders to disclose all costs associated with a mortgage
#9
What is private mortgage insurance (PMI) used for?
To insure the homeowner in case of job loss
To protect the lender in case of default
To cover maintenance costs of the property
To pay property taxes
#10
What is the purpose of a home warranty?
To insure the home against natural disasters
To protect the home against structural damage
To cover the cost of repairs to home systems and appliances
To provide liability coverage for accidents in the home
#11
Which of the following is a potential disadvantage of buying a home?
Building equity
Stable housing costs
Responsibility for maintenance and repairs
Flexibility to move
#12
What is the difference between a conventional loan and an FHA loan?
A conventional loan is insured by the Federal Housing Administration, while an FHA loan is not
A conventional loan requires a higher down payment than an FHA loan
A conventional loan is only available to first-time homebuyers, while an FHA loan is available to anyone
A conventional loan has more flexible qualification requirements than an FHA loan
#13
What is the purpose of a deed in real estate?
To transfer ownership of a property from the seller to the buyer
To provide a detailed history of the property's ownership
To secure a mortgage loan with the property as collateral
To determine the property's market value
#14
What is the purpose of a pre-approval letter in the home buying process?
To guarantee a specific interest rate for a mortgage
To provide an estimate of the loan amount a buyer qualifies for
To secure a mortgage before finding a property to purchase
To finalize the sale of a property
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