Exam 5: Making Automobile and Housing Decisions

An adjustable rate mortgage with a baseline rate of 4%,a margin of 1%,and an annual cap of 1% would have an initial mortgage rate no higher than 6%.

When purchasing a vehicle,____ should be settled first.

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 term condominium/townhome refers to a type of [architecture | ownership].

One who leases an automobile is typically responsible for early termination costs,even when early termination is due to theft or auto accidents.

Private Mortgage Insurance (PMI)protects the lender from loss on a loan.

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 interest rate on an ARM can be increased [automatically every year | only when a designated index increases].

Reasons why auto leasing is so popular include all of the following except:

____ is a fixed auto ownership cost.

Sean and Lisa (age 25 and 28,respectively)are purchasing their first home for $200,000 with a 5% down payment.They will withdraw the down payment from Lisa's IRA.They will have to pay ____ on the IRA withdrawal.

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 first major expenditure most people make is to buy a [house | car].

The ____ would be included in a rental contract or lease agreement.

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. -Talk with the auto dealer about auto leasing and financing [before | after] negotiating the best price on the vehicle.

If you made a down payment of $11,000 on a $110,000 house,the lender no doubt will require ____ as a result of the size of the down payment.

Leslie has been offered the choice of either a $1,000 rebate or a 5.5%,48-month loan for the new car she is purchasing.If Leslie will be financing $15,000 and she can get a 7.5%,48-month loan at her credit union,should she take the $1,000 rebate or the 5.5% loan? (Show all work. )

An automobile is a personal use asset for most buyers.

____ is a reason for owning your own home.

A fee charged by lenders as a condition of a mortgage loan that effectively raises the interest rate is called

When you lease your apartment from the corporation that owns the building and your lease is an ownership share,your apartment is

The sticker price is an important number to know when negotiating a good price on a new car.

According to federal law,private mortgage insurance on most loans currently made ends automatically once the mortgage is paid down to 80% of the original value of the house.