The Homebuyer

Quiz

Answers are on the following page

• Write down your answers and see how you score!

The more credit cards I have the better my credit history will be.

True or False?

False!However, do not close any credit card accounts.Just keep balances low or at zero, and pay on

time.

PITI, the acronym for the four components of the monthly mortgage payment, stands for:

Possible Income To Invest

Principal, Interest, Total, Income.  

Payment, Income, Total, Installment.  

pity

Principal, Interest, Taxes, Insurance.  

Principle, Interest, Taxes, and Insurance.

Your monthly housing expense.

True or False: By comparing how much you can afford per month with different loan terms (15 or 30 years) and interest rates, you can determine a range of “safe” monthly payments.

True!

If your Monthly Net Income is less than your anticipated After Home Purchase monthly expense total, you should:

fill out the monthly spending planner again.  

increase your monthly income as soon as possible.  

not include household operations, maintenance, or improvements on the monthly expense section.  

Lower the number of tax exemptions for income taxes.

attempt to reduce your monthly expenses. 

D. Attempt to reduce your monthly expenses.

All of these are essential for successful budgeting except:

setting realistic goals.  

exercising will power to prevent overspending.  

developing a good record-keeping system.  

adhering rigidly to your objectives never making adjustments.

A. adhering rigidly to your objectives never making adjustments.

According to the Fair Housing Act, no lender may charge excessive fees or refuse to make a mortgage loan based on your:

Sexual orientation

race. 

religious background 

national origin or ethnicity.  

All of the above

E. All of the above

Why is it important to get an attorney during the Offer to Purchase process?

To review the offer to purchase for accuracy

to ensure property meets safety code requirements.  

to prevent mistakes that could affect the legal passage of property title.  

additional contingencies may need to be added to the offer that you had not considered.  

All of the above

E. All of the above

True of False: As a homeowner, it’s recommended to have up to six months’ living expenses in savings.

True

An advantage of a fixed-rate mortgage is:

None of the above

Negative amortization

the possibility for the interest rate to go down

the adjustments have lifetime caps.  

the monthly principal and interest payment are predictable and unchanging throughout the life of the loan.  

D. The monthly principle and interest payment are predictable and unchanging throughout the life of the loan.

True or False: if the seller does not agree to the contingencies on the Offer to Purchase, the buyer is still legally required to purchase the house.

False

In order to choose the most appropriate loan for your needs, you need to consider:

whether your income is stable or fluctuating.  

the amount of time you intend to live in the house. 

the possibility of significant rate increases.  

All of the above

D. All of the above

Which of the following documents may a lender require to review your income?

W-2s covering the most recent two tax years 

Federal tax returns for the past 2 years

bank statements showing child support maintenance  

most recent year-to-date pay stub  

All of the above

E. All of the above

Title insurance protects:

The attorney

The municipality

The Realtor

The seller

The buyer

E. The buyer

The closing costs include more than just the price of the property. Which one of these does NOT appear on the Settlement Statement?

Attorney’s fees

Lender’s fees

Pre payment of real estate taxes

Insurance costs

The water bill

D. The water bill

The purpose of the Deed is:

To attest to the structural integrity of the property

to prove you've done a good deed by purchasing the house.  

to provide proof of homeowner's insurance.  

to prove that the property has no lien against it.  

to provide legal documentation transferring ownership of the property from the seller to the buyer.  

B. To provide legal documentation

transferring ownership of the property from the

seller to the buyer.

In the event of unexpected financial difficulty, the best thing you can do is to:

Ignore the proplem

Take out another loan

Contact the real estate agent

Declare bankruptcy

contact the lender.  

A. Contact the lender

Which of the following is NOT usually covered by homeowner’s insurance policies?

DVD

vandalism

theft

Fire damage

normal wear and tear.  

A. Normal wear and tear

True or False: Lenders insist that borrowers have homeowners insurance primarily to protect the value of your home in case it is damaged or destroyed.

True!

I hope you enjoyed the quiz!

Let me know your results!

David J DeCarlo

ddecarlo@rhmcloan.com