Cwmc Module 17: Home Competency Test
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This quiz is part of LFE Institute's CWMC (Certified Workplace Money Coaching) course. It will test your proficiency in the Home Module (Module 17) of the program. The questions are all multiple choice, and are designed to be a review of this Module. Let LFE know when you've successfully completed this test and are ready to begin the next Module.
Correct answers required for passing grade: 13/15
- 1.
Upon completing Module 17 (Home), Money Coaches will be able to step employees through home buying and selling decisions by arming them with _______ they may never hear from realtors.
- A.
3 Web sites
- B.
The best property choices
- C.
ERISA guidelines
- D.
The information
- E.
Legal jargon
Correct Answer
D. The informationExplanation
Upon completing Module 17 (Home), Money Coaches will be able to step employees through home buying and selling decisions by arming them with the information they may never hear from realtors. This suggests that the information provided in Module 17 will include valuable insights and knowledge about the home buying and selling process that employees may not typically receive from real estate agents. This information could potentially give employees a competitive advantage and help them make more informed decisions in the real estate market.Rate this question:
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- 2.
Which of the following are considered pros when deciding to rent versus buy a home? (check all that apply)
- A.
The landlord pays the cost of repairs and maintenance
- B.
You may not receive income tax savings for rent
- C.
Move-in costs are generally less and are fairly minimal
- D.
You will not benefit from potential gains in the price of the home
- E.
Rent may rise with inflation
Correct Answer(s)
A. The landlord pays the cost of repairs and maintenance
C. Move-in costs are generally less and are fairly minimalExplanation
Renting a home has several advantages over buying. One of the pros is that the landlord is responsible for paying the cost of repairs and maintenance, relieving the tenant from these financial burdens. Additionally, move-in costs are usually lower and minimal compared to the significant upfront costs associated with buying a home.Rate this question:
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- 3.
An employee is trying to decide whether or not to withdraw savings to use as a down payment on a home. As a Money Coach, which questions could you ask to help make this decision? (check all that apply)
- A.
Can you afford not to have this cash if there is an emergency and you need funds immediately?
- B.
Are there other financing options or buyer assistance programs that would allow you to hold on to some of your cash?
- C.
Can you wait to purchase a home at a later date and continue to build up your savings?
- D.
How quickly could you rebuild your savings?
Correct Answer(s)
A. Can you afford not to have this cash if there is an emergency and you need funds immediately?
B. Are there other financing options or buyer assistance programs that would allow you to hold on to some of your cash?
C. Can you wait to purchase a home at a later date and continue to build up your savings?
D. How quickly could you rebuild your savings?Explanation
The correct answer includes questions that help assess the potential risks and alternatives associated with withdrawing savings for a down payment on a home. These questions address the importance of having emergency funds, exploring other financing options, considering the possibility of delaying the purchase to save more, and evaluating the ability to rebuild savings quickly. By considering these factors, the employee can make an informed decision about whether or not to withdraw their savings for a down payment.Rate this question:
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- 4.
Which of the following items does NOT relate to buying or selling a home?
- A.
Reducing home improvement costs
- B.
Access to an EAP Provider
- C.
Investing in retirement or vacation homes
- D.
The pros and cons of auctions
- E.
The value of picking the “right” location
Correct Answer
B. Access to an EAP ProviderExplanation
Access to an EAP Provider does not relate to buying or selling a home because an EAP (Employee Assistance Program) is a work-based intervention program designed to assist employees in resolving personal problems that may be affecting their job performance, health, and well-being. It is not directly related to the process of buying or selling a home.Rate this question:
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- 5.
Which of the following tax strategies would you suggest a consumer investigate before purchasing a home? (check all that apply)
- A.
Check city or state sales tax rates for local hotels
- B.
Evaluate earnings after taxes if you were to put the down payment into another investment instead
- C.
Check property tax rates in the area
- D.
Figure the amount of tax benefits/write-offs you may receive from owning a home
- E.
Request a one-on-one meeting with an IRS agent prior to final closing date
Correct Answer(s)
B. Evaluate earnings after taxes if you were to put the down payment into another investment instead
C. Check property tax rates in the area
D. Figure the amount of tax benefits/write-offs you may receive from owning a homeExplanation
Before purchasing a home, it would be wise for a consumer to investigate several tax strategies. Firstly, evaluating earnings after taxes if the down payment was invested elsewhere would allow the consumer to compare the potential returns of different investment options. Secondly, checking the property tax rates in the area is important as it would give an idea of the ongoing tax obligations associated with the property. Lastly, figuring out the amount of tax benefits and write-offs that can be received from owning a home would help in understanding the potential tax advantages of homeownership.Rate this question:
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- 6.
There are many guidelines to consider in a Money Coaching response. Of the following choices, which would you rate as the most important?
- A.
Using the correct style of bullet
- B.
Thorough content
- C.
Precise margins
- D.
Style
- E.
Appropriate document length
Correct Answer
B. Thorough contentExplanation
Thorough content is the most important guideline to consider in a Money Coaching response. This means that the response should provide comprehensive and detailed information, addressing all relevant aspects of the topic. Thorough content ensures that all necessary information is included, allowing for a comprehensive understanding of the subject matter. It also demonstrates the author's knowledge and expertise on the topic, which is crucial in providing valuable and accurate guidance in Money Coaching.Rate this question:
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- 7.
Which law makes it illegal to deny housing to a tenant on the grounds of race, color, sex, religion, disability, family status, or national origin?
- A.
Title 11 of the United States Federal Statutory Code
- B.
Americans with Disabilities Act
- C.
The Fair Housing Act
- D.
Architectural Barriers Act
- E.
Civil Rights Act of 1964
Correct Answer
C. The Fair Housing ActExplanation
The Fair Housing Act makes it illegal to deny housing to a tenant based on their race, color, sex, religion, disability, family status, or national origin. This law was enacted as part of the Civil Rights Act of 1964 and aims to protect individuals from discrimination in housing based on these protected characteristics. The Fair Housing Act promotes equal opportunity and fair treatment in the housing market.Rate this question:
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- 8.
When could it make sense for a homeowner to use an inheritance to pay off his/her mortgage?
- A.
If the homeowner is approaching retirement and doesn't want a mortgage payment each month
- B.
When the interest the homeowner pays on the home is greater than the return he/she could get if the money was invested elsewhere
- C.
If the security of not having a mortgage is more important to the homeowner than having that money in the bank or some type of investment
- D.
All of the above
- E.
It never makes economic sense to use a lump-sum inheritance to pay off a mortgage
Correct Answer
D. All of the aboveExplanation
Using an inheritance to pay off a mortgage could make sense for a homeowner in several situations. Firstly, if the homeowner is approaching retirement and wants to eliminate the burden of a monthly mortgage payment. Secondly, if the interest paid on the mortgage is higher than the potential return from investing the inheritance elsewhere. Lastly, if the homeowner values the security of not having a mortgage more than having the money in the bank or invested. Therefore, all of the above reasons could justify using an inheritance to pay off a mortgage.Rate this question:
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- 9.
If an individual decides that now is the best time to purchase a home, which of the following would you NOT suggest as an approach to save money on the purchase?
- A.
If you really love the house, it’s okay to pay more for it than market value
- B.
Find a house that fits your needs
- C.
Determine how much you can afford
- D.
Stick to your price range even if it means losing the home to someone else
- E.
In a buyer’s market, make a very low offer even if you really want the home
Correct Answer
A. If you really love the house, it’s okay to pay more for it than market valueExplanation
It is not suggested to pay more than market value for a house, even if you really love it. Paying more than market value can lead to financial strain and may not be a wise investment decision. It is important to stick to your price range and make a purchase that is within your budget.Rate this question:
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- 10.
Which of the following expenses applies more to renting than to home ownership?
- A.
Property taxes
- B.
Repairs and maintenance
- C.
Sewer fees
- D.
Security deposit
- E.
Interest on mortgage payments
Correct Answer
D. Security depositExplanation
A security deposit is an expense that applies more to renting than to home ownership. When renting a property, tenants are usually required to pay a security deposit upfront, which acts as a form of insurance for the landlord in case of any damages or unpaid rent. This expense is not applicable to home ownership as homeowners do not typically have to pay a security deposit when purchasing a property.Rate this question:
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- 11.
Location, location, location! Realtors say this is primarily what sells houses. Of the following statements, which are additional tips or strategies buyers should consider when purchasing a home? (check all that apply)
- A.
Check out neighborhood code enforcement: boats, commercial vans, property improvements, etc.
- B.
The best investment is generally the biggest, most expensive house on the block
- C.
Buyers don’t need a home inspection if their agent is familiar with the home and the repairs that may be required
- D.
It’s generally safe to live in an area even if it is prone to flooding when it rains
- E.
Avoid purchasing a home within 2 miles of a landfill, train tracks, or near a water treatment plant
Correct Answer(s)
A. Check out neighborhood code enforcement: boats, commercial vans, property improvements, etc.
E. Avoid purchasing a home within 2 miles of a landfill, train tracks, or near a water treatment plantExplanation
The correct answer is "Check out neighborhood code enforcement: boats, commercial vans, property improvements, etc." and "Avoid purchasing a home within 2 miles of a landfill, train tracks, or near a water treatment plant." These tips are important for buyers to consider when purchasing a home. Checking out neighborhood code enforcement helps buyers understand the regulations and restrictions in the area, which can affect their living experience. Avoiding homes near landfills, train tracks, or water treatment plants is important to ensure a safe and healthy living environment, as these locations can have negative impacts on air and water quality.Rate this question:
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- 12.
Which of the following statements about realtors are TRUE?
- A.
The realtor for the seller is required by law to disclose the lowest price the homeowner will accept
- B.
The realtor for the seller must reveal why the homeowner is selling the home
- C.
State Realty Boards require that realtors must recommend what they think is best for the client
- D.
All of the above are true
- E.
None of the above are true
Correct Answer
E. None of the above are true -
- 13.
When might it NOT make sense for homeowners to pay off their mortgages?
- A.
If the interest they pay is one of the few tax deductions they can claim each year
- B.
When borrowing against the new equity to pay for debt reduction, cars, trips, etc. may be too tempting
- C.
When the amount of money that can be earned by investing those dollars elsewhere is greater than the interest the homeowner is paying on the home
- D.
All of the above
- E.
None of the above
Correct Answer
D. All of the aboveExplanation
It might not make sense for homeowners to pay off their mortgages when the interest they pay is one of the few tax deductions they can claim each year. Additionally, if they borrow against the new equity to pay for debt reduction, cars, trips, etc., it may be too tempting and not financially wise to pay off the mortgage. Lastly, if the amount of money that can be earned by investing those dollars elsewhere is greater than the interest the homeowner is paying on the home, it would be more beneficial to invest rather than pay off the mortgage.Rate this question:
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- 14.
As a Money Coach, which of the following often-overlooked expenses would you remind new homebuyers to consider when purchasing a home? (check all that apply)
- A.
Real estate taxes
- B.
Insurance costs
- C.
Landscaping expenses
- D.
Home repairs, window treatments, exterior upkeep, etc.
Correct Answer(s)
A. Real estate taxes
B. Insurance costs
C. Landscaping expenses
D. Home repairs, window treatments, exterior upkeep, etc.Explanation
When purchasing a home, there are several often-overlooked expenses that a Money Coach would remind new homebuyers to consider. These include real estate taxes, insurance costs, landscaping expenses, and home repairs, window treatments, and exterior upkeep. Real estate taxes are an important expense that homeowners must budget for, as they are typically paid annually or semi-annually. Insurance costs, such as homeowners insurance, are necessary to protect the investment in the home. Landscaping expenses, including lawn maintenance and gardening, can add up over time. Additionally, home repairs, window treatments, and exterior upkeep are ongoing expenses that homeowners should plan for to maintain the value and condition of their home.Rate this question:
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- 15.
Currently, the homebuyer tax credit available under the American Recovery and Reinvestment Act of 2009:
- A.
Is only available to new home buyers or buyers who have not owned a home in the past 3 years
- B.
Can only be used for the tax payer's primary residence
- C.
Must be repaid if the homebuyer sells the home within 3 years
- D.
Is equal to 15% of the purchase price, up to $8,000
- E.
Does not apply if the home is purchased from a family member
Correct Answer(s)
A. Is only available to new home buyers or buyers who have not owned a home in the past 3 years
B. Can only be used for the tax payer's primary residence
C. Must be repaid if the homebuyer sells the home within 3 years
E. Does not apply if the home is purchased from a family memberExplanation
The explanation for the given correct answer is that the homebuyer tax credit under the American Recovery and Reinvestment Act of 2009 is limited to new home buyers or buyers who have not owned a home in the past 3 years. It can only be used for the tax payer's primary residence. If the homebuyer sells the home within 3 years, they must repay the tax credit. Additionally, the tax credit does not apply if the home is purchased from a family member.Rate this question:
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May 17, 2023Quiz Edited by
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Jul 09, 2009Quiz Created by
Alice Whinnery
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