Exam 8: The Home and Automobile Decision

Your friends just told you that they were denied a mortgage by their bank. The loan officer told them that they did not pass the 36 percent rule. They are confused and want you to explain what happened?

Which of the following is considered to be a key element to effective debt management?

The Internet can help you research neighborhoods and find a community in which you'd like to live.

Which of the following is not a one-time fee connected with purchasing a house?

Abraham is buying a new truck. The sale price for the truck is $23,410. His bank is loaning him the money at an APR of 6.5 for 5 years. How much will Abraham's monthly truck payment be?

You are a newlywed, and you and your spouse have just found your dream home. Problem is, you do not have 20% for a down payment on the house. You will probably need to obtain

A mortgage broker earns income based on fees or commissions on the loans they broker.

Which one of the following is not a key to finding housing that fits your needs?

Nancy Wong has decided to move from her apartment into a house she is purchasing. She wants to enjoy the advantages of home ownership, such as

What are the common mortgage loan options?

The rate cap on an ARM sets a dollar limit on how much your monthly payment can increase during any adjustment period.

List the four steps in the automobile decision.

Suppose that you want to purchase a home. Your lender has told you that the standard limit for your total debt limit ratio is ________ including your mortgage debt.

A(n) ________ ARM combines the aspects of fixed-rate and adjustable-rate mortgages.

With private mortgage insurance, many lenders will allow you to borrow more than 80% of the appraised value of the home. What is the purpose of this action?

Bob and Mary Kay have gross household income of $7,000 per month. They both have great credit scores and the home they are interested in buying appraised higher than the selling price. They have combined monthly debt payments of $300 in student loans, $650 in car loans, and they pay their credit cards in full every month. The PITI on the new home will be $1,800 per month. Before they pay the $250 loan application fee, they are asking you for your opinion on whether they will get approved for a mortgage. What will you advise them?

Explain the recurring costs of home ownership and why you need to budget for them.

Subprime mortgages are mortgages taken out by people with low credit scores.

A situation in which the monthly payments are less than the interest that is due on the loan, and the unpaid interest is thus added to the principal is called

Why should you set a goal to eventually be able to put at least 20% down on purchasing a home?