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Basics (Personal Finance) Beginner: Home Ownership

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1.
An amount paid to secure a real estate agreement is called _______.
Choose wisely. There is only one correct answer.
Earnest money. To secure the agreed price, the buyer is expected to give earnest money to the seller to secure the agreement.
2.
Your cost basis equals the sales price of your house minus what you paid for it.
Choose wisely. There is only one correct answer.
False. Your cost basis is what you paid to buy AND upgrade your home.
3.
Points are a pre-payment of principal.
Choose wisely. There is only one correct answer.
False. Points are a pre-payment of interest.
4.
The current market value of your home, minus what you owe on it, is commonly known as your _________.
Choose wisely. There is only one correct answer.
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.
5.
Title insurance on a house protects the mortgage lender if you become insolvent.
Choose wisely. There is only one correct answer.
False. Title insurance guarantees that the seller is the bona fide owner and has all rights to transfer ownership.
DONE
Introduction to Home Ownership Why Invest in a Home? Expenses Involved in Home Purchase How Do You Finance a Home? How Do You Increase the Value of a Home? Summary of Home Ownership Find out what you learned