Title: QUIZ: Mortgage 101 -- Personal Finance 101 Conversation
Course: FRE Resources > Section: Mortgage 101 -- Personal Finance 101 Conversations

Q: Which of the following is true?
- Credit is using someone else’s money, usually a bank or other institution, at no charge to the customer.
- Banks and other institutions charge customers interest for keeping money safe.
- People establish good credit history by paying bills on time and not borrowing more than they can pay back.
- Credit history does not affect future choices such as renting an apartment or buying a home.
A: People establish good credit history by paying bills on time and not borrowing more than they can pay back.

Q: Which of the following might a lender require to guarantee loan repayment?
- Collateral
- Mortgage payment
- Interest
- Principal
A: Collateral

Q: What percent of a home purchase price is a good rule of thumb as a mortgage down payment?
- 5%
- 10%
- 15%
- 20%
A: 20%

Q: Lenders use credit history to decide whether to extend credit, and at what interest rate.
- True
- False
A: True

Q: Which of the following is true?
- Higher credit scores typically lead to less favorable interest rates.
- Higher credit scores typically mean the risk of loan default is lower.
- Lower credit scores typically mean the risk of loan default is lower.
- Lower credit scores typically lead to more favorable interest rates.
A: Higher credit scores typically mean the risk of loan default is lower.

Q: Which of the following mortgage terms would likely have the lowest interest rate?
- 10 years
- 15 years
- 20 years
- 30 years
A: 10 years

Q: Which of the following is true?
- There’s no formal process or meeting when purchasing a home.
- Information about types of loans, terms, and financing options are only provided to those who can afford a large down payment.
- Consumers are told the loan terms, conditions, and their rights when buying a home.
- Homes values don’t fluctuate so equity always increases as borrowers make payments.
A: Consumers are told the loan terms, conditions, and their rights when buying a home.

Q: Contracts such as mortgages can require borrowers to purchase insurance.
- True
- False
A: True

Q: Which of the following is generally expressed as a percentage?
- Collateral
- Mortgage
- Interest
- Principal
A: Interest

Q: Which of the following is an advantage of renting over buying a home?
- It’s easier to sell a home than to get out of a rental lease if you have to move.
- Routine maintenance and repair costs for a rental are usually paid by the person who owns the rental.
- There’s a possibility of building equity, or value, in the home and that won’t happen in a rental.
- Renters pay more in property taxes which reduces disposable income.
A: Routine maintenance and repair costs for a rental are usually paid by the person who owns the rental.