Test your knowledge

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Renters must pay condominium fees.

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True

False

False. Owners of condominium units must pay those fees, though they may factor them into any rent they charge to renters.

The proportion of your mortgage that goes to interest _______.

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Declines over time

Rises over time

Stays the same over time

Declines over time. Your mortgage payment consists of both principal and interest. The proportion that is interest starts out high and gradually declines over the life of the loan.

Mortgage insurance protects your home and its contents.

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True

False

False. Homeowner insurance is what protects your home and its contents. Mortgage insurance protects the lender who loaned you the money to buy the home in case you default on your payments.

As a renter, you might find that you are responsible for shoveling snow or cutting the grass.

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True

False

True. Some leases require you to do some maintenance.

The current market value of your home, minus what you owe on it, is commonly known as your _________.

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Mortgage

Interest

Capital gain

Home equity

Home equity. Your home equity is the difference between what you own (the current market value of your property) and what you owe on the property.

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