Unit 3: Concepts & Responsibilities of Home Ownership

Question 1

condominium

Answer 1

absolute ownership pf an apartment or unit plus undivided interest in common elements

Question 2

Cooperative

Answer 2

residential multiunit building held by a corporation that is owned and operated for the benefit of persons living within the building who are stockholders of the corporation

Question 3

Planned Unit Development (PUD)

Answer 3

planned combo of diverse land uses such as housing, recreation, & shopping

Question 4

mixed use property

Answer 4

accommodates more than one use such as commercial and residential

Question 5

manufactured homes

Answer 5

constructed in a controlled factory environment built to Federal Manufactured Home Construction & Safety Standards (HUD Code)

Question 6

Modular Homes

Answer 6

constructed with large wall & roof components in a factory

Question 7

time sharing

Answer 7

permission is given to use certain property for certain intervals of time

Question 8

investment

Answer 8

money directed toward the purchase, improvement, and development of an asset in expectation of income or profits

Question 9

equity

Answer 9

current market value of a property minus and loans

Question 10

capital gain

Answer 10

income earned from the sale of an asset

Question 11

Homeowners Insurance Policy

Answer 11

covers a residential RE owner against financial loss on a dwelling and its contents & includes liability coverage and loss of use

Question 12

endorsement

Answer 12

additional document attached to an original insurance policy that amends the original; a rider

Question 13

coinsurance clause

Answer 13

provision covering real property that requires policyholder to maintain coverage generally equal to at least 80% of the actual replacement cost

Question 14

deductible clause

Answer 14

limits the exposure to the loss or an insured homeowner

Question 15

Federal Emergency Management Agency (FEMA)

Answer 15

sets program standards for flood insurance

Question 16

Prospective homebuyers should evaluate the desirability of the community based on…

Answer 16

cultural activities, employment opportunities, recreational and social facilities, transportation, etc.

Question 17

What should be considered if you’re thinking of purchasing a home?

Answer 17

initial price and the continuing expenses

Question 18

Lenders can still be flexible based on…

Answer 18

the type of loan, borrowers credit history, and their capacity to pay

Question 19

How can a property owner increase equity?

Answer 19

by paying off debts on the property

Question 20

What are some income tax benefits available to homeowners?

Answer 20

deduction of mortgage interest payments, loan discount points, and property taxes from their federal income taxes, subject to certain criteria and limitations

Question 21

Married homeowners who file jointly can…

Answer 21

exclude up to $500,000 of capital gains on the sale or exchange of a principal residence

Question 22

What will flood insurance cover?

Answer 22

insured structures damaged by flood event. vehicles, lawns, and livestock are not covered