Exam 5: Making Automobile and Housing Decisions

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Most of the closing costs will usually be paid by the home [buyer | seller].

The market price of a house is $125,000 and the homebuyer will borrow $100,000.Two points will equal $2,000.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You made an $800 mortgage payment.The interest on the mortgage for this month was $850.You have just experienced [negative | positive] amortization.

Balloon payment mortgages generally must be refinanced.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The purchase price of the house you are buying is $180,000.A loan-to-value ratio of 90% will produce a mortgage amount of [$162,000 | $180,000].

The down payment on the car you are leasing is called the

The monthly mortgage payment divided by your monthly gross income equals an affordability ratio.