1. As long as you can afford it, buying a home is always a smart idea.
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True
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False
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2. When considering you for a loan, banks usually want to be sure that your monthly housing costs do not exceed ___ percent of your gross income, and that the sum of housing costs plus long-term debt payments are not more than ___ percent of income?
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36 and 28 percent
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26 and 38 percent
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28 and 36 percent
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38 and 26 percent
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3. When choosing a mortgage, you should usually select a fixed-rate loan over an adjustable-rate loan when ...
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You plan to remain in the house for five or more years
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Your income may change sharply within the next three years
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You believe that interest rates are headed down during the next four years
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You are unable to decide what fixed rate is best
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4. What does it mean to pay "points" on a mortgage loan?
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You are pre-paying a percentage of the loan principal in advance in order to obtain a lower monthly payment
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You are pre-paying a percentage of the interest up front in exchange for getting a lower interest rate
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You are pre-paying a mortgage broker to get him or her to work harder on finding you a loan
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5. What's the most important factor in choosing a home?
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The view
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The amount of acreage in the lot
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The location
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The quality of the kitchen
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6. Most real estate agents represent the ...
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Seller
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Buyer
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7. When selling a home, what is the main factor to consider in setting a price?
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What you paid for the house plus the cost of any renovations
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How much your neighbor got three years ago
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What it's worth to you and what you need for the next house
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How much similar homes have sold for within the past three months
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8. What's the difference between a condominium and a cooperative, or co-op?
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The condo is a townhouse, while the co-op is an apartment
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The condo owner owns his home, while the co-op owner owns shares in a corporation
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The condo always costs more, while the co-op always costs less
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The condo owner rents his unit, while the co-op owner owns it outright
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9. Mortgages whose interest payments rise or fall in step with prevailing interest rates are called ...
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Step up mortgages
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Adjustable rate mortgages
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Balloon mortgages
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Fixed rate mortgages
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10. What is the difference between an appraisal and a home inspection?
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The buyer pays for the inspection in order check the home's defects while the seller pays for the appraisal in order to prove the value of the house
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The bank requires the inspection to make sure the house is free from defects while the seller demands the appraisal to support his list price
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The lender requires the buyer to pay for the appraisal to establish the home's worth, while the buyer pays for the inspection on his own to check for defects
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There's no real difference, they are the same thing
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11. Your initial bid should always be at least 10 percent below the asking price.
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True
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False
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12. Once you decide that you want to buy a home, what's the first thing you should do?
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Get an agent
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Look at homes
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Check your credit record
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13. When you choose the location of a home, what single factor is traditionally likely to help most in maintaining, or even boosting, the resale value when it comes time to sell?
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How close it is to a large medical center
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How close it is to a big office district
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Whether it is in a good school district
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Whether the property taxes are low
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14. How do most real estate agents get paid?
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By the seller, through a commission based on the sales price of the home
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By the buyer, who pays a commission based on the sales price of the home
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By both the buyer and seller, who split the agent's fee
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15. Assuming that you and your spouse's (or partner's) parents are both well-off, and they want to help you raise a down payment for a home, what is the most they can give to you and your spouse in a single year without triggering the gift tax laws?
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11,000
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22,000
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44,000
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88,000
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