When to use 나 요?

I have a terrible Korean phrase book. How do I know it's bad? Every time I show it to a Korean native speaker, they laugh!!
Anyway, most questions it poses such as do you know this, or where is this, always end in 나요 but I rarely hear it used...
e.g. 여기서 사시나요? Do you live here?
은행 어디 있나요? Where is the bank?
I realize that saying 살아요? and 있어요? mean the same thing but in what colloquial situation would you use the 나요 form? 

Additional Details:
I want to sound more natural. Do native speakers ever use this form to ask questions to waiter/waitress or sales clerk?

 In my view, women tend to use this ending pattern "- 나요?" in place of "아/어/여요?", and it makes sentences softer.

 -나요 used for making a question.
하나요? Do you do this? / Are you doing this?
가나요? Do you go? / Are you going?
먹나요? Do you eat? / Are you eating?
Yes, I think you can use any verb with -나요? or ~하나요?