Chapter 09 – The Housing Decision: Factors and Finances
1. (p. 283) Most people select a place of residence based on available financial resources, needs,
and lifestyle.
2. (p. 288) Ease of mobility is an advantage of renting.
3. (p. 290) A lease protects the rights of both the tenant and the landlord.
Chapter 09 – The Housing Decision: Factors and Finances
4. (p. 293) Condominiums involve the purchase of an individual living unit rather than an entire
building.
5. (p. 293) Cooperative housing is a form of housing in which the units in a building are owned
by a nonprofit organization.
6. (p. 295) Many people believe that location is the most important factor to consider when
selecting a home.
Chapter 09 – The Housing Decision: Factors and Finances
7. (p. 297) Current interest rates can affect the price of a home.
8. (p. 297) Negotiating a purchase price for a home usually involves an offer and counteroffers.
9. (p. 298) The amount of the down payment will affect the amount of the monthly mortgage
needed to purchase a home.
Chapter 09 – The Housing Decision: Factors and Finances
10. (p. 301) Prepaid interest may be a part of a mortgage agreement.
11. (p. 301) Amortization refers to changes in the monthly payment for a variable rate mortgage.
12. (p. 302) An FHA-insured mortgage has less risk than a conventional mortgage for the
financial institution.
13. (p. 303) A balloon mortgage can help a homebuyer when interest rates are high but are
expected to come down in the near future.
Chapter 09 – The Housing Decision: Factors and Finances
14. (p. 307) An escrow account is designed to reduce the cost of a mortgage.
15. (p. 309) An appraisal refers to the price for which a home has been sold.
16. (p. 309) Home improvements may contribute more to the value of the home than the cost of
the renovations.
17. (p. 303) The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by
which the interest rate can vary.
Chapter 09 – The Housing Decision: Factors and Finances
18. (p. 306) A deed is the document that transfers ownership of the property from one person to
another.
19. (p. 289) Renting is more advantageous than buying a home when you are seeking:
20. (p. 287) A common opportunity cost associated with renting is interest lost on money spent
for:
Chapter 09 – The Housing Decision: Factors and Finances
21. (p. 289) A cost associated with home buying would be:
22. (p. 289) Renting would be most appropriate for people who:
23. (p. 288) Kate plans to rent instead of buying her housing. Which advantage of renting will
she realize?
Chapter 09 – The Housing Decision: Factors and Finances
24. (p. 289) The legal document involved in renting an apartment is called a(n):
25. (p. 290) What does it mean to sublet an apartment?
26. (p. 290) The purpose of a security deposit is to:
Chapter 09 – The Housing Decision: Factors and Finances
27. (p. 293) A condominium involves:
28. (p. 293) Ownership of an individual housing unit in a building is commonly called:
29. (p. 293) A cooperative housing arrangement involves:
Chapter 09 – The Housing Decision: Factors and Finances
30. (p. 294) Prefabricated housing refers to:
31. (p. 291) Which of these is a common financial benefit of home ownership?
32. (p. 291) Natasha and Al received a statement reporting that they paid $8,000 in mortgage
interest during the past year. If they are in a 28 percent tax bracket, this deduction may reduce
their taxable income by:
Chapter 09 – The Housing Decision: Factors and Finances
33. (p. 301) What is the name commonly used to refer to the recent national crisis in which with
many mortgages were issued to borrowers with poor credit histories, resulting in numerous
loan defaults?
34. (p. 294-295) Which of the following would increase the amount that a person could afford to
spend on a home?
35. (p. 295) The most commonly considered factor when selecting a home is the:
Chapter 09 – The Housing Decision: Factors and Finances
36. (p. 295) The purpose of zoning laws is to:
37. (p. 307) Which types of problems are least likely to be covered by a home buyer warranty?
38. (p. 297) The purpose of a counteroffer is to:
Chapter 09 – The Housing Decision: Factors and Finances
39. (p. 297) Earnest money is used:
40. (p. 299) The amount of mortgage a person is eligible for would be increased by:
41. (p. 299) Which of the following would increase the speed of equity growth for a
homebuyer?
Chapter 09 – The Housing Decision: Factors and Finances
42. (p. 301) What is prepaid interest charged by a mortgage company called?
43. (p. 301) Todd Foley is applying for a $100,000 mortgage. He can select either a $600
monthly payment with no points or a $520 payment with two points. How many months will
it take Todd to cover the cost of the discount points if he takes the lower monthly payment?
44. (p. 301) A conventional mortgage usually involves:
Chapter 09 – The Housing Decision: Factors and Finances
45. (p. 301) Which of the following is an example of a conventional mortgage?
46. (p. 302-303) A VA-guaranteed loan program provides assistance to:
47. (p. 302-303) A possible disadvantage of FHA and VA mortgages can be:
Chapter 09 – The Housing Decision: Factors and Finances
48. (p. 303) The purpose of a rate cap with an adjustable rate mortgage is to:
49. (p. 304) Which one of these situations creates negative amortization?
50. (p. 304) A newly married couple is having trouble affording a home. What type of mortgage
arrangement would reduce the monthly payment as a result of an interest rate subsidy from a
builder or real estate developer?
Chapter 09 – The Housing Decision: Factors and Finances
51. (p. 303) A short-term mortgage with a very large final payment is called a ____________
mortgage.
52. (p. 304) A home equity loan may also be referred to as a ____________ mortgage.
53. (p. 305) Refinancing of a mortgage is recommended when: