Ch.3 Home Ownership

Question 1

In addition to mortgage payments, a homeowner’s cost of ownership includes:

Answer 1

Taxes
Insurance
Repairs and maintenance

Question 2

Which factors can affect insurance premiums?

Answer 2

Age and condition
Location
The policyholder’s claim history

Question 3

The gain on the sale of an asset for the seller is known as ___________

Answer 3

Capital gain

Question 4

The gain on the sale of a property is the difference between the initial purchase price and the final sales price.
T or F

Answer 4

False

Question 5

The National Flood Insurance Program offers flood insurance to which of the following?
A. Homeowners 
B. Renters 
C. Business owners
D. All of the above

Answer 5

D

Question 6

How do single-family homes differ from townhomes or condominiums?

Answer 6

Single-family homes are not attached to another dwelling

Question 7

The typical lot in a single-family home neighborhood is subject to private land use controls known as ___________ or ____________, conditions and __________

Answer 7

Deed restrictions or covenants, conditions and restrictions

Question 8

What are Residential condominiums?

Answer 8

Multi-family complexes with individually owned units

Question 9

When a condominium is sold what three interests are created?

Answer 9

1. Fee simple ownership of the unit
2. Fee simple ownership in an undivided interest in the common area
3. An easement to the airspace occupied by the unit

Question 10

Cooperatives share many of the same characteristics of as condominiums but most often owned by____________

Answer 10

Corporations

Question 11

Retro-Commissioned or concerted structures include the of conversion of _________ into __________.

Answer 11

Existing buildings, residential units

Question 12

Mixed-use developments are….

Answer 12

Building types or combinations of buildings that allow for a “mix” of uses.

Question 13

A timeshare gives the owner the right to

Answer 13

Occupy a property for a certain time interval

Question 14

On-going monthly expenses and payments for a home are

Answer 14

Mortgage principle and interest payments

Insurance

Utilities

Repairs and maintenance

Property taxes

Question 15

TDHCA

Answer 15

Texas department of housing and community affairs

Question 16

Tax deductibles

Answer 16

Interest paid in a mortgage of up to $1,000,000

Property taxes paid on a first and second home

Mortgage insurance

Question 17

When an asset is sold, the sale results in a capital ______ or ______ for the seller.

When a primary residence is sold, the capital gain on the sale may be exempt from federal income taxation. The tax-exempt limits are

The home must have been the principal residence of the seller for at least _____ of the five years prior to the sale.

Answer 17

Gain or loss

$250,000 for an individual return
$500,000 if married and filing jointly

2 years

Question 18

The gain is defined as the difference between the _________ and the ________ of the seller

Answer 18

Net sales price, adjusted cost basis

Question 19

The __________ of real estate minus the sum of all _____________ is the owners equity

Answer 19

Financial value, mortgage debt

Question 20

Amortized loan

Answer 20

Is one whose balance is reduced over time with regular payments that include principle and interest.

Question 21

Homeowners insurance

Answer 21

Is a contract between the insurance company and the policy holder

Question 22

The intent of the coinsurance clause is to

Answer 22

Ensure that the risk of loss is spread equally among policyholders