Buying a house

Which factor affects the monthly payment on a house?

• Credit Score

• House Size

• Location

• Interest Rate

What happens to the loan amount when you put down a larger down payment?

• The loan amount increases.

• The loan amount remains the same.

• The loan amount decreases.

• The loan amount becomes unmanageable.

What is pre-approval in the context of mortgages?

• A verbal agreement from a lender to provide a loan.

• Written proof a lender is willing and ready to lend an individual a specific amount of money for a mortgage based on verified income and assets.

• An estimate of how much a borrower can afford to spend on a home.

• A document that guarantees a loan will be approved regardless of the borrower's financial situation.

What is the difference between fixed-rate and adjustable-rate mortgages?

• Fixed-rate mortgages have a constant interest rate throughout the loan term, while adjustable-rate mortgages have interest rates that can change periodically.

• Fixed-rate mortgages have variable interest rates, while adjustable-rate mortgages have fixed rates.

• Fixed-rate mortgages are only available for short terms, while adjustable-rate mortgages are long-term loans.

• Fixed-rate mortgages require a larger down payment than adjustable-rate mortgages.

What is a down payment?

• A fee paid to the real estate agent

• An initial payment made when purchasing a property, typically expressed as a percentage of the purchase price.

• A monthly payment made towards a mortgage

• A tax paid on the purchase of a property

What is PMI (Private Mortgage Insurance)?

• Insurance that protects the lender if the borrower defaults on a loan, typically required when the down payment is less than 20%.

• A type of insurance that covers the borrower in case of job loss.

• A government program that provides loans to first-time homebuyers.

• An insurance policy that protects against property damage.

What is a title search?

• A process to verify the legal ownership of a property and check for any claims or liens against it.

• A method to assess the market value of a property.

• A procedure to inspect the physical condition of a property.

• A technique used to determine the historical significance of a property.

What is the purpose of a home inspection?

• To evaluate the condition of a property before purchase, identifying any potential issues.

• To determine the market value of a property.

• To assess the aesthetic appeal of a home.

• To provide a warranty for the property after purchase.

What is the loan-to-value (LTV) ratio?

• A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.

• A measure of the interest rate on a loan compared to the market rate.

• A calculation used to determine the total cost of a loan including fees and interest.

• A ratio that compares the total debt of a borrower to their income.

What is the significance of a credit score in the mortgage process?

• A credit score determines the amount of down payment required.

• A credit score helps lenders assess the risk of lending money and can influence the interest rate offered.

• A credit score is only important for personal loans, not mortgages.

• A credit score has no impact on the mortgage approval process.