Pearson Chapter 13 Financial Literacy

Question 1

Reasons to buy a home could include …..

Accepted Answer

all the above., a flipping opportunity., an opportunity for growing equity., additional space for a growing family.

Question 2

Policy riders are …..

Accepted Answer

a type of additional insurance to cover beyond typical insurance.

Question 3

A real estate agent is …...

Accepted Answer

anyone who has earned a real estate license.

Question 4

A real estate broker is …...

Accepted Answer

a real estate agent that has passed a broker's exam.

Question 5

A line of credit allows a person to borrow as needed up to $1M.

Accepted Answer

False

Question 6

A home equity loan allows a homeowner to

Accepted Answer

borrow against the value of their home.

Question 7

An adjustable rate mortgage has a rate that ….

Accepted Answer

may go up or down over time.

Question 8

Closing costs are negotiable.

Accepted Answer

True

Question 9

A teaser rate is an extremely low interest rate for a short period of time …….

Accepted Answer

to help sweeten a deal.

Question 10

A deductible is the amount …...

Accepted Answer

that you pay before insurance will pay.

Question 11

A fixed rate mortgage means the interest rate stays the same for the entire length of the loan.

Accepted Answer

True

Question 12

ARMs are always preferred over FRMs.

Accepted Answer

False

Question 13

A subprime mortgage is for people with poor credit scores.

Accepted Answer

True

Question 14

A down payment on a home is …..

Accepted Answer

$$$ paid upfront toward the purchase of a home.

Question 15

Title insurance helps resolve problems that may arise if a seller doesn't legally own the home/property.

Accepted Answer

True

Question 16

You should consider locating your home near …..

Accepted Answer

good schools if you have kids, near your work, amenities, all the above should be considered

Question 17

Math skills are important for calculating insurance and interest rates (financial literacy).

Accepted Answer

True

Question 18

FSBO stands for "For Sale By Owner".

Accepted Answer

True

Question 19

If you have a lot of valuable family heirlooms, you should consider a policy rider.

Accepted Answer

True

Question 20

PITI stands for …….

Accepted Answer

principal, interest, taxes, and insurance.

Question 21

If you purchase a home for $100,000, a 10% down payment would be …….

Accepted Answer

$10,000

Question 22

Subprime mortgages typically have high interest rates.

Accepted Answer

True

Question 23

You should not buy a home if you only plan to live in it for less than a year.

Accepted Answer

True

Question 24

A mortgage is the type of loan used to purchase a fleet of cars.

Accepted Answer

False

Question 25

Bankers are required to charge you an origination fee for a loan.

Accepted Answer

False

Question 26

Collateral is an asset pledged as security for repayment of a

Accepted Answer

loan.

Question 27

You should always buy a home that is …..

Accepted Answer

within your budget.

Question 28

An appraisal is for the value of your home, while an inspection …..

Accepted Answer

is to find any issues with the condition of a house.

Question 29

Collateral is a liability pledged as security for repayment of a loan.

Accepted Answer

False

Question 30

Your home's cost should not exceed how much of your gross annual income?

Accepted Answer

2 1/2 times your annual gross income

Pearson Chapter 13 Financial Literacy

Questions 30

Pearson Chapter 13 Financial Literacy

Questions 30