AGLS Exam 3- FLASHCARDS - Home Buying Part 1 done

Question 1

What are some pros to home buying?

Answer 1

Personal space, ownership, forced savings, horizon, you can deduct interest/taxes, and tax free gain on sale

Question 2

What are some cons to home buying?

Answer 2

Upfront costs, ongoing costs, tied down, possible drop-in value

Question 3

What is a FHA loan?

Answer 3

Insured loans for approved lenders; low requirements; 3.5% down payment

Question 4

What is a piggy back loan?

Answer 4

Secondary home loan (80-10-10 or 80-15-5; reduces) down payment required

Question 5

What is paivate morgage insurance?

Answer 5

Fee if down payment is less than 20%; protects lender from borrower default

Question 6

What is an assumable loan?

Answer 6

Can be transferred when the home is resold (minimizing closing costs for buyer)

Question 7

What are closing costs?

Answer 7

Expenses associated with finalizing the transfer of ownership of the house

Question 8

What percent of the sales price of the house are closing costs?

Answer 8

2-5%

Question 9

What are common closing costs?

Answer 9

Points, origination fee, appraisal fee, and other fees

Question 10

What are points?

Answer 10

Pay 1% of the loan amount in exchange for lower interest rate

Question 11

What are origination fees?

Answer 11

1% of the loan amount. Charged for having the lender review and finalize the loan

Question 12

What are appraisal fees?

Answer 12

$200 to $300 to have the house’s value determined to substantiate the loan amount

Question 13

What are examples of other fees?

Answer 13

Notary fees, title search and insurance fees