1. Home equity is defined as:

How much the home has appreciated in value since you purchased it
The part of the home’s value that you own outright
The balance remaining on your mortgage

2. Which is the following do appraisers typically not consider when evaluating a home:

How long you have lived in the home
The home’s square footage
Access to transportation

3. Which of the following usually has a fixed interest rate:

Home equity line of credit
Reverse mortgage
Home equity loan

4 . If you are “upside-down”, that means:

You owe more on your mortgage(s) than the value of your house
The current market value of your house is less than what you paid for it
You cannot afford to make your mortgage payments

5. When you refinance for more than what you owe on your existing mortgage, that is called a(n):

Expansion refinance
Cash-out refinance
Equity refinance

6. If you are planning to sell your house soon, refinancing to a mortgage with a lower interest rate:

May not be a good idea, since the closing costs could be higher than what you will save in interest
Will always save you money, no matter how long you plan to stay in the house
Only makes sense if you can lower your interest rate by at least one percentage point

7. A reverse mortgage is called such because:

You loan someone money to purchase a home, instead of borrowing
Over time, your debt rises and your equity decreases, unlike with a traditional mortgage
You use it to pay of your existing mortgage

8. In general, in order to get a reverse mortgage, everyone on the title must be at least:

65
60
62

9. Refinancing or taking out a second mortgage:

Is always a good idea, since the interest rates are low, and at least some of the interest is usually tax deductible
Can lead to problems if you cannot afford the new payments
Is only a good idea if you really want some extra money

10. For which of the following loan types does the Truth in Lending Act not give you the right to cancel within three business days:

Home equity loan, if it for less than $20,000
Reverse mortgage, if it is with an in-state lender
Refinance, if it done with the same lender who held your old mortgage, and you do not take any cash out