d. $7,000. correct Personal Finance Short Answer 1. Match the following terms in the left column with the correct definitions shown in the right column. a. Homeowner's insurance. b. Mortgage loan. c. Home equity. d. Mortgage insurance. e. Settlement or closing. f. Loan origination fee. g. Good faith estimate. h. Closing costs. 1. A standardized form on which the loan characteristics, estimated payment, and estimated closing costs are shown. 2. Insurance that reimburses the homeowner in the event that the home is destroyed by fire. 3. Often the single-largest closing cost, it compensates the lender for providing the mortgage loan. 4. The total fees associated with the purchase of a house and receiving a loan. 5. A loan secured by real property. 6. The difference between what a house could sell for and the remaining amount owed on the mortgage. 7. The process through which the property is legally transferred from the seller to the buyer. 8. Insurance that protects the lender in the event that the borrower does not repay the mortgage. 2. Answer each of the following questions regarding the trade-off between mortgage interest rates and closing costs. a. Under what circumstances would it be financially beneficial to get a mortgage loan with a slightly higher interest rate to significantly reduce the closing costs? b. Under what circumstances would it be financially beneficial to pay higher closing costs to get a mortgage loan with a slightly lower interest rate? 3. When you begin looking for a home to purchase, you should also shop for a loan. In addition to obtain- ing a traditional loan from a bank or mortgage lender, It may also be possible to obtain an FHA mortgage loan. FHA loans generally require a lower down payment. If you could qualify for either an FHA or conven- tional mortgage and you had a sufficiently high down payment already saved, which loan would allow you to purchase a more expensive home? 4. It is important to have sufficient cash savings before beginning the home search process. Describe some of the most significant common fees and costs associated with purchasing a home. 5. Discuss three different ways that housing equity is built. 6. Housing prices can fluctuate over time as housing market and economic conditions vary. Given this, how can you avoid having negative housing equity when housing prices fluctuate