AGLS Exam 3- FLASHCARDS - Home buying part 2

Question 1

With what type of mortgage does the rate not change?

Answer 1

Fixed rate mortgage

Question 2

With what type of mortgage do payment amounts not change?

Answer 2

Fixed rate mortgage

Question 3

Wat type of mortgage allows for budgeting?

Answer 3

Fixed rate mortgage

Question 4

What type of mortgage is the safest choice for most people?

Answer 4

Fixed rate mortgage

Question 5

What type of mortgage has a low initial teaser rate?

Answer 5

Adjustable rate mortgage

Question 6

What type of mortgage adjusts frequently afterwards?

Answer 6

Adjustable rate mortgage

Question 7

What type of mortgage has complex rules and fees?

Answer 7

Adjustable rate mortgage

Question 8

What is a periodic cap?

Answer 8

Max the interest rate can increase each adjustment period

Question 9

What is negative ammortization?

Answer 9

Payments are less than interest due; unpaid interest is added to principal

Question 10

What is a lifetime cap?

Answer 10

Max the interest rate can increase over the life of the loan

Question 11

What is a payment cap?

Answer 11

Max payment amount allowed at any time

Question 12

What is a lock-in agreement?

Answer 12

Agreement guaranteeing interest rate provided home closes within the period

Question 13

What length mortgage is associated with lower payments?

Answer 13

15 year

Question 14

What length mortgage is associated with higher chance of forclosure?

Answer 14

15 year

Question 15

What length mortgage has a higher interest rate?

Answer 15

30 year

Question 16

What length mortgage has lower interest paid?

Answer 16

30 year

Question 17

What are things you should consider when buying a new home?

Answer 17

Location, type, and lifestyle

Question 18

What are factors of location you should consider when buying a new home?

Answer 18

Safe and friendly community, quality schools, proximity to frequented places, and traffic (noise)

Question 19

What are factors of home type you should consider when buying a new home?

Answer 19

New or old, occupancy (single family, condo, townhome), one story or multiple, and number of bedrooms or bathrooms

Question 20

What are factors of lifestyle you should consider when buying a new home?

Answer 20

Who will live in the house, what you will do in it, if we will have pets, and lawn maintenance

Question 21

What is the first step to buying a new house?

Answer 21

Make an offer

Question 22

What percent should you consider the offer less than the asking price of the house?

Answer 22

5% less

Question 23

What might too much back and forth between offers do?

Answer 23

Kill the deal

Question 24

What is the second step to buying a new house?

Answer 24

Write a contract

Question 25

What should a contract include?

Answer 25

Price, method of payment, buyer and seller's names, date of transfer, description of the property, a suitable funding clause, the portion of utilities taxes and insurance to be paid to the buyer and seller, expected condition of the home, and any other agreed upon contingencies

Question 26

What is the third step to buying a new house?

Answer 26

Earnest money

Question 27

What is earnest money?

Answer 27

A deposit on the home purchase to assure the seller that the buyer is serious about buying the house

Question 28

What is the fourth step to buying a new house?

Answer 28

Inspection

Question 29

When do you want your inspection done?

Answer 29

Soon after you make an offer

Question 30

What can you do if the inspector finds issues?

Answer 30

You can renegotiate your price, require the seller to resolve the issues, or walk away entirely

Question 31

What is the fifth step to buying a new house?

Answer 31

Appraisal

Question 32

What is an appraisal?

Answer 32

Confirms the home is worth the price

Question 33

What is the sixth step to buying a new house?

Answer 33

Final walk through

Question 34

What should you do before you close on the house?

Answer 34

Email the seller a list of what must be fixed or changed

Question 35

What is the last step to buying a new house?

Answer 35

Closing

Question 36

What is closing?

Answer 36

The time at which the title is transferred and the seller is paid in full for the house