Exam 5: Making Automobile and Housing Decisions

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The most popular type of lease is the [closed-end | open-end] lease.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -With most ARMs,the interest rate over the lifetime of the loan can [increase to any level | increase only up to the pre-stated maximum].

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.

Capitalized cost on an auto lease is the same as the price of the car.

The most popular mortgage loan for financing a home purchase is a(n)

First-time homebuyers can withdraw up to $25,000 from an IRA without penalty if they are 30 years of age or less.

Renting affords more flexibility than home ownership.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The condominium/townhome buyer shares joint ownership of [common areas | his living space].

Points can be deducted from federal income taxes in the year paid when they are used to

To refinance a mortgage,the lender typically requires at least 20% equity in the home.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The choice of the index used with an ARM will make [much | little] difference in the volatility of your payment changes.

Automobiles tend to decrease in value over time.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The purchase price of the house you are buying is $140,000.A loan-to-value ratio of 80% will require a down payment of [$34,000 | $28,000].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The first major expenditure most people make is to buy a [house | car].

A condominium or townhome buyer will make monthly mortgage payments as well as pay a fee for services and maintenance of common areas.

Your mortgage payment is $1,500 per month.Of this amount,insurance is $50,property taxes are $200,and interest is about $1,100.Assuming you have other itemized deductions that already exceed your standard deduction and that you are in the 31% marginal tax bracket,what is the reduction in your tax liability as a result of owning a home with this mortgage.

Commercial banks are an important source of both mortgage loans and interim construction loans.

In a co-op,the buyer receives title to a unit and joint ownership of the common areas.

There are large regional differences in the price of housing.