Chp 3 - Concepts Of Home Ownership

Front 1

list the types of housing

Back 1

apartment complexes
condominium
cooperative
planned unit developments
retirement communities
highrise developments
converted-use properties
manufactured housing
modular homes
time-shares

Front 2

group of apartment buildings with any number of units in each building

Back 2

apartment complex

Front 3

owners own their units individually & share ownership or common facilities (common elements)

Back 3

condominium

Front 4

*units share common walls & facilities within a larger building
*owners do not own the units
*a corporation holds title to the real estate
*unit owners purchase shares of stock in corporation
*owners receive proprietary leases, not conventional deeds

Back 4

cooperative

Front 5

*master planned-communities
*merge diverse land uses as housing recreation & commercial units into one self-contained development
*owners do not have direct ownership interest in the common areas
*community association is formed to maintain common areas with fees collected from owners

Back 5

planned unit developments (PUD)

Front 6

who sponsors programs that provide low down-payment mortgage loans

Back 6

Federal Housing Administration (FHA)
Department of Veterans Affairs (VA)

Front 7

what are the basic costs of owning a home

Back 7

principal, interest, taxes and insurance
(PITI)

Front 8

the interest or value that an owner has in property over and above any indebtedness
(current market value - property debt = __________ )

Back 8

equity

Front 9

what can homeowners deduct from their gross income

Back 9

*mortgage interest payments on 1st and 2nd homes (for balances below $1 million or $500,000 if filing separately)
*real estate taxes
*certain loan origination fees
*loan discount points (whether paid by the buyer or seller)
*loan prepayment penalties

Front 10

what is the most common homeowner's insurance policy

Back 10

basic form

Front 11

what kind of insurance coverage does basic form provide

Back 11

fire & lightning
glass breakage
windstorm & hail
explosion
riot and civil commotion
damage by aircraft
damage from vehicles
damage from smoke
vandalism and malicious mischief
theft
loss of property removed from the premises when it is endangered by fire or other perils

Front 12

what kind of insurance coverage does broad form provide

Back 12

falling objects
damage due to weight of ice, snow, or sleet
collapse of all or part of the building
bursting, cracking, burning, or bulging of a steam or hot water heating sstem or of appliances used to heat water
accidental discharge, leakage or overflow of water or steam from within a plumbing, a heating, or an air-conditioning system
freezing of plumbing, heating, and air-conditioning systems and domestic appliances
injury to electrical appliances, devices, fixtures, and wiring from short circuits or other accidentally generated currents

Front 13

*provision in an insurance policy that requires the owner maintain insurance equal to at least 80% of the replacement cost of the dwelling (not including the price of the land)
*owner who has this type of policy may make a claim for the full cost of the repair or replacement of the damaged property without deductions for depreciation or annual wear and tear

Back 13

coinsurance clause

Front 14

construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original

Back 14

replacement cost

Front 15

Replacement cost less depreciation

Back 15

actual cash value

Front 16

What process uses dividing the percentage of replacement cost actually covered by the policy by the minimum coverage requirement (usually 90%)

Back 16

prorate

Front 17

______ allows multiple purchasers to share ownership in a property.

Back 17

time-shares

Front 18

What does PITI stand for?

Back 18

Principal, Interest, Taxes and Insurance

Front 19

In the late 1990's the Federal Government enacted several Federal Tax reforms that significantly changed the importance of tax considerations for most homes. For instance $_________ is now excluded from capital gains for married couples who file jointly and $__________ for people who file single for owners who have lived in their house for 2 of the last 5 years.

Back 19

$500,000 and $250,000

Front 20

What is the limit first time home buyers can deduct from their IRA for down payment and how long must it be spent to avoid penalty.

Back 20

$10,000 and 120 days

Front 21

Home owners may deduct from their gross income...

Back 21

Mortgage Interest Payments
Real Estate Taxes
Loan Discount Points
Loan Prepayment Penalties

Front 22

Coverage for injures or loses sustained from within the unit.

Back 22

Liability Coverage

Front 23

This provision usually requires that the homeowner maintain insurance equal to a specified percentage usually 80% of the cost of the dwelling.

Back 23

Coinsurance clause

Front 24

In designated areas, _______ is required on all types of buildings– residential, commercial, industrial, and agricultural-for either the value of the property or the amount of the mortgage.

Back 24

flood insurance

Front 25

Homeowners may deduct from their income some or all of the_______________, as well as real estate taxes as well as other expenses.

Back 25

mortgage interest paid