. If you drive 12100 miles per year, your car gets 21 miles per gallon, and the average cost of gasoline is $4.2 per gallon, how much will you spend on gasoline per year (rounded to the nearest dollar)?

A. $3457

B. $2420

C. $2881

D. $576

 

5. You are deciding between a car that gets 40 miles per gallon and one that gets 20 miles per gallon. If gasoline costs $4 per gallon and you typically drive 12600 miles per year, how much will you save each year by choosing the more fuel-efficient vehicle?

A. $630

B. $2520

C. $1890

D. $1260

 

6. How long will it take to recoup the $1600 price difference between a hybrid and a regular sedan assuming gas costs $3 per gallon, you drive 10440 miles per year, and the hybrid gets 45 miles per gallon (MPG) on the highway and the regular sedan gets 30 MPG on the highway?
A. 6.0 YEARS

B. 3.9 YEARS

C. 1 YEAR

D. 4.6 YEARS

 

8. Which of the following factors is true when considering a 48-month loan at 6% APR and a 36-month loan at 5% APR?

A. You will pay less interest for the shorter-term loan.

B. You will pay less interest for the shorter-term loan.

C. The shorter-term loan has a lower monthly payment

D. The longer-term loan has a higher monthly payment.

 

12. Mortgage insurance premiums are based on
A. Your mortgage loan balance

B. The equity of your home

C. The credit history

D. The value of your home

 

13. Mark is applying for a home loan and wants to buy a house worth $351400. How much of a minimum down payment will he have to make to avoid mortgage insurance?

A. $35140

B. $70280

C. $52710

D. $87350

 

15. Charles's monthly gross income is $3300. He is buying a house that requires a $740 monthly payment. Property taxes would be $200 per month and insurance premiums of $53 per month. What is Charles's mortgage debt service ratio?

A. 60.18%

B. 30.09%

C. 14.76%

D.29.52%

 

16. Which type of mortgage allows homeowners to stay in their homes but receive a stream of cash flow from their homes?

A. reverse annuity mortgage

B. insured mortgage

C. graduated mortgage

D. shared appreciation mortgage

 

17. In a home purchase, what are discount points?

A. Interest paid up front to the lender in return for a reduced annual interest rate

B. A reduction in the closing costs due to the fact the buyer put up a large amount of earnest money

C. A reduction in the annual interest rate of the mortgage loan because the buyer made a higher-than-required down payment

D. A reduced annual interest rate because of a very high credit score

 

18. Borrowers sometimes pay points to their mortgage lender in order to

A. educe the term of the loan.

B. cover their closing costs.

C. reduce the interest rate.

D. reduce the principal balance of the loan.

 

19. The lender requires a borrower's total debt payment ratio to be 36% or less, and the mortgage debt service ratio to be no more than 28% of gross income. If the Gonzales have PITI payments of $1875 per month and $425 of additional debt, how much gross income do they need to qualify for the mortgage?

A. $6389

B. $8214

C. $6696

D. $5208

 

20. William is considering a mortgage loan with two points. If he plans to make a down payment of $40000 and finance $200000, how much will two points cost him?

A. $4800

B. $3200

C. $4000

D. $800

 

21. If you have an adjustable rate mortgage with an initial rate of 7.20 percent, an annual interest rate cap of 1 percentage point, and a lifetime cap of 5 percentage points, what is the maximum annual interest rate you could end up paying on the ARM?

A. 5 percent

B. 13.20 percent

C. 6 percent

D. 12.20 percent

 

22. The commission charged by real estate brokers commonly ranges from
A. 5 to 7 percent.

B. 8 to 10 percent.

C. 2 to 4 percent.

D. 4 to 6 percent.

 

23. An account held by the lender used to pay closing costs and prepayments of property taxes and insurance is known as a(n)

A. closing account.

B. escheatment account.

C. cash management.

D. escrow account.

 

24. Among other factors, the price a buyer is willing to pay for a house is a function of
A. the family size of the seller and the distance to work.

B. mortgage interest rates and the condition of real estate market.

C. the marital status of the buyer and years of employment.

D. the income of the seller and the family size.

 

25. If a home is well maintained, but the neighbors do not clean their yards, the price of the well-maintained home will
A. decline because potential buyers will not like to be surrounded by neglected yards that would be eyesores to passersby.

B. increase as the home will look better compared to other homes in the neighborhood.

C. increase because the supply of good homes in the neighborhood will be low.

D. be unaffected because every homeowner is only concerned about their own property and neighbors can do as they please without affecting other home values.

 

26. Gary has applied for a mortgage on a house that he is buying for a purchase price of $250000. He will put 20% down. Gary is concerned that the interest rates may rise by the time the transaction closes in 45 to 60 days. In order to lock in the current low mortgage rate, his lender requires a 0.75% fee. In order to lock in the current interest rate, Gary will have to pay the lender
A. $938.

B. $750.

C. $1500.

D. $1875.

 

28. A real estate agent who works exclusively for the buyer and owes no legal duty to the seller is a
A. buyer broker.

B. cooperating broker.

C. commission broker.

D. listing broker.

 

29. If a car is worth $30300 today and is expected to be worth $16600 in two years, then the finance charges on a two-year lease will be based on

A. $30300.

B. $16600.

C. $46900.

D. $13700.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Here are the answers to the questions 1 B 2420 Miles per year 12100 Miles per gallon 21 Gallons of gas used per year 1210021 576 gallons Co... View the full answer