Question

TRUE/FALSE, Write T if the statement is true and 'F' if the statement is false. 1) The Real Estate Settlement Procedures Act (RESPA) requires that loan applicants be given an estimate of the closing costs after the actual closing. 1) - 2) A disadvantage of home ownership is the deductibility of mortgage interest and real estate tax payments. 2) 3) When interest rates are high and the demand for homes is low, prices of homes will likely be higher 4) Mortgage points are paid to the lender at the end of the mortgage. 5) Most new mortgages are assumable. 6) Most low- and middle-income people can qualify for a VA-guaranteed loan. 7) If you pay an extra $100 per month on your mortgage, your total loan principal will decrease and your total interest will remain the same. 8) A real estate agent can help screen potential buyers to determine whether they will qualify for a mortgage MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 9) Which of the following is NOT a benefit of home ownership? A) Deductibility of real estate taxes B) Maintenance and costs of repairs and home improvements C) Personalized living location D) Stability of residence E) Deductibility of mortgage interest 10) 10) Which of the following is a form of housing in which the owners pay a monthly fee for maintenance of the common areas? A) Cooperative housing B) Condominium C) Apartment D) Single-family dwelling E) Manufactured home

Answer 1

1. True

Because RESPA helps home buyers to understand the closing process and closing costs by requires that loan applicants be given an estimate of closing costs before the actual closing.

2.False

Deductibility of mortgage interest and real estate tax payments is advantages of home ownership as it reduce the taxable income of home owners.

3. False

When mortgage interest are high, this makes purchasing of a home less affordable and low the demand of the home which reduced the prices of houses.

4. True

Mortgage Points are the fees paid to the lender at closing in exchange for a better interest rate.