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1. A mortgage calculator shows principal and interest only. What might still be missing?
- The house’s street number
- Property taxes, insurance, and other ownership costs
- The spelling of the seller’s name
- Nothing; it is always the complete cost
Answer: B. Principal and interest are not necessarily the full payment or ownership cost. Check escrow, insurance, dues, utilities, and maintenance as applicable.
2. What is the main distinction between an appraisal and a home inspection?
- Appraisal estimates value; inspection examines condition within its scope
- They always answer identical questions
- Inspection guarantees future resale value
- Appraisal guarantees the roof will never leak
Answer: A. An appraisal and an inspection serve different purposes. Neither replaces the other or guarantees future outcomes.
3. Your quoted payment already includes property-tax escrow. What would adding that same tax estimate again do?
- Make the estimate more accurate
- Lower the actual tax
- Change the loan term
- Double-count the expense
Answer: D. Read the components carefully. Adding an expense already included in the total counts it twice.
4. An inspector could not access an area. What does that mean?
- It is guaranteed to be sound
- It must be replaced
- Its condition remains an unresolved question within that inspection
- The property’s value automatically rises
Answer: C. An inaccessible area is a limitation, not a clean bill of health. Ask whether further investigation is appropriate.
5. Can total housing costs change when principal and interest are fixed?
- No, every other cost is frozen
- Yes; taxes, insurance, maintenance, or other costs can change
- Only if you repaint
- Only if the street name changes
Answer: B. A fixed loan payment component does not freeze property taxes, insurance, repairs, or other ownership expenses.
6. Where should you check inspection-contingency deadlines for your purchase?
- The purchase contract, with qualified help as needed
- A random listing for another home
- An unrelated buyer’s social post
- Only the inspection company’s homepage
Answer: A. Deadlines and notice requirements are transaction-specific. Read the contract and ask your agent or attorney to explain them.
7. What should be aligned before comparing two Loan Estimates?
- Only the lender logo
- Loan amount, term, type, and relevant quote timing
- Only the page count
- Only the monthly payment font
Answer: B. A meaningful comparison starts with comparable loan assumptions and timing. Different amounts, products, or lock conditions can explain price differences.
8. Discount points generally involve which trade-off?
- A free reduction with no conditions
- A guaranteed resale profit
- An upfront cost in exchange for a lower offered rate
- Automatic cancellation of property taxes
Answer: C. Points can lower the offered rate in exchange for an upfront charge. Whether that trade-off is useful depends on the actual offer and circumstances.
9. In a simplified example, $1,800 upfront saves $30 monthly. Ignoring all other factors, how many months equal that upfront cost?
- 60 months
- 6 months
- 30 months
- 180 months
Answer: A. $1,800 divided by $30 equals 60 months. This is only simple arithmetic; a real comparison includes other costs, timing, and uncertainty.
10. Which statement about lender credits is sound?
- They remove every future loan cost
- They always require no trade-off
- They are the same as your deposit
- They may offset upfront costs while involving a higher rate
Answer: D. Compare the specific rate and credit together. A lower upfront amount does not necessarily mean a lower total borrowing cost.
11. Are closing costs and cash to close always the same number?
- Yes, by definition
- No; cash to close can also reflect the down payment, deposits, and credits
- Yes, if a mortgage is used
- Only the heading differs
Answer: B. Cash to close reflects a broader transaction calculation. Read the components to understand how costs, payments already made, and credits interact.
12. An unexpected email changes closing wire instructions. What should you do?
- Use the new email’s phone number without checking
- Send money quickly to avoid questions
- Verify through a previously trusted independent contact channel
- Reply with your bank login
Answer: C. Payment instructions can be impersonated. Independently confirm changes using a known contact route rather than details supplied only in the unexpected message.
13. A simplified closing calculation has $20,000 down, $7,000 costs, a $5,000 deposit already paid, and $2,000 applicable credits. What remains?
- $20,000
- $34,000
- $27,000
- $12,000
Answer: A. $20,000 + $7,000 − $5,000 − $2,000 = $20,000. Real closing calculations may contain additional adjustments.
14. Why compare the Closing Disclosure with the relevant Loan Estimate?
- To make the documents look identical
- To avoid reading any terms
- To guarantee approval
- To identify and ask about changed terms or amounts
Answer: D. The comparison helps surface differences that need explanation before closing. A change is not automatically an error or automatically acceptable.