Quiz 6 - Home Equity

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1. Becoming a homeowner typically ______   your income tax liability:

a. Lowers
b. Has no effect on
b. Raises

2. Which of the following is usually deductible on your federal income tax return?:

a. Repairs
b. Property taxes
c. Homeowners insurance

3. To adjust the amount of federal taxes being withheld from your paycheck, you can fill out a new:

a. Form W-2
b. Form W-4
c. Form W-9

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

a. Cash-out refinance
b. Expansion refinance
b. Equity refinance

5. When you refinance your mortgage and take cash out you:

a. Increase the principal you owe and decrease the equity that you have.
b. Decrease the principal you   owe and increase the equity you have
c. Will always save money in   the long run

6. Which of the following is a type of revolving credit?:

a. First mortgage
b. Home equity loan
c. Home equity line of   credit

7. Your lender can foreclose on you if you stop paying your home equity loan or line of credit:

a. True
b. False

Correct answers: 1.a, 2.b, 3.b, 4.a, 5.a, 6.c, 7.a