Question 1

____ could be deducted on your Federal income taxes.

Accepted Answer

A)  Rent payments 
B)  Homeowner's insurance 
C)  Real estate taxes 
D)  Utility bills 
E)  None of these 
A)  Rent payments 
B)  Homeowner's insurance 
C)  Real estate taxes 
D)  Utility bills 
E)  None of these

Question 2

The price of the car you are leasing is called the

Accepted Answer

A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction. 
A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction.

Question 3

Most lenders do not want mortgage payments plus other debt payments to exceed ____ percent of your gross monthly income.

Accepted Answer

A)  10-15 
B)  15-18 
C)  25-30 
D)  30-33 
E)  33-38 
A)  10-15 
B)  15-18 
C)  25-30 
D)  30-33 
E)  33-38

Question 4

The highest average cost housing to purchase would be a

Accepted Answer

A)  cooperative apartment. 
B)  condominium. 
C)  single-family detached home. 
D)  row house. 
E)  manufactured home. 
A)  cooperative apartment. 
B)  condominium. 
C)  single-family detached home. 
D)  row house. 
E)  manufactured home.

Question 5

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

Accepted Answer

A)  mortgage points. 
B)  a down payment. 
C)  a commission. 
D)  an add-on charge. 
E)  loan fee. 
A)  mortgage points. 
B)  a down payment. 
C)  a commission. 
D)  an add-on charge. 
E)  loan fee.

Question 6

Balloon payment mortgages generally must be refinanced.

Accepted Answer

A) True 
 B)False

Question 7

The difference between the market value of your home and the balance of the mortgage is your equity in the property.

Accepted Answer

A) True 
 B)False

Question 8

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?

Accepted Answer

@#IMG-DLM& Take the $1,000 reb

Question 9

If you purchase a $110,000 and make a 10% down payment,how much would 1 point cost at closing?

Accepted Answer

A)  $ 765 
B)  $ 990 
C)  $1,100 
D)  $1,530 
E)  $1,800 
A)  $ 765 
B)  $ 990 
C)  $1,100 
D)  $1,530 
E)  $1,800

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Homeowners may be able to deduct from their taxable income [mortgage principal | mortgage interest]

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 11

____ is a reason for preferring to rent rather than to buy.

Accepted Answer

A)  Mobility 
B)  No maintenance worries 
C)  Lower monthly cash flows 
D)  Down payment money better used elsewhere 
E)  All of these are reasons 
A)  Mobility 
B)  No maintenance worries 
C)  Lower monthly cash flows 
D)  Down payment money better used elsewhere 
E)  All of these are reasons

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-If you drive a lot of miles each year rather than a few,the operating cost per mile will [increase | stay the same | decrease].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 14

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

Accepted Answer

A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction. 
A)  money factor. 
B)  capitalized cost. 
C)  residual value. 
D)  purchase option. 
E)  capitalized cost reduction.

Question 15

Terms of renting a housing unit may be contained in a contract called a

Accepted Answer

A)  deposit requirement. 
B)  renewal option. 
C)  lease. 
D)  housing code. 
E)  housing standard. 
A)  deposit requirement. 
B)  renewal option. 
C)  lease. 
D)  housing code. 
E)  housing standard.

Question 16

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

Accepted Answer

A)  $13,250 
B)  $ 5,040 
C)  $ 3,710 
D)  $ 2,800 
E)  none 
A)  $13,250 
B)  $ 5,040 
C)  $ 3,710 
D)  $ 2,800 
E)  none

Question 17

One can increase the tax benefits of homeownership by selecting a shorter term mortgage,for example 15 years rather than 30 years.

Accepted Answer

A) True 
 B)False

Question 18

In which of the following situations would you have to pay additional money when returning a vehicle using a closed-end lease?

Accepted Answer

A)  residual value is less than expected 
B)  residual value is more than expected 
C)  mileage limits were exceeded 
D)  a and c 
E)  b and c 
A)  residual value is less than expected 
B)  residual value is more than expected 
C)  mileage limits were exceeded 
D)  a and c 
E)  b and c

Question 19

Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400.She wants to finance a vehicle over no more than 4 years.If lenders are currently offering 6 percent interest on 5-year loans,what is the maximum price Judy can pay for a vehicle?

Accepted Answer

PMT= $400,I=6/12,N=6

Question 20

Condominium and Townhome owners can deduct real estate taxes and mortgage interest on their federal income taxes but co-op owners cannot take these deductions.

Accepted Answer

A) True 
 B)False

____ could be deducted on your Federal income taxes.

The price of the car you are leasing is called the

Most lenders do not want mortgage payments plus other debt payments to exceed ____ percent of your gross monthly income.

The highest average cost housing to purchase would be a

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

Balloon payment mortgages generally must be refinanced.

The difference between the market value of your home and the balance of the mortgage is your equity in the property.

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?

If you purchase a $110,000 and make a 10% down payment,how much would 1 point cost at closing?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Homeowners may be able to deduct from their taxable income [mortgage principal | mortgage interest]

____ is a reason for preferring to rent rather than to buy.

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 -If you drive a lot of miles each year rather than a few,the operating cost per mile will [increase | stay the same | decrease].

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

Terms of renting a housing unit may be contained in a contract called a

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

One can increase the tax benefits of homeownership by selecting a shorter term mortgage,for example 15 years rather than 30 years.

In which of the following situations would you have to pay additional money when returning a vehicle using a closed-end lease?

Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400.She wants to finance a vehicle over no more than 4 years.If lenders are currently offering 6 percent interest on 5-year loans,what is the maximum price Judy can pay for a vehicle?

Condominium and Townhome owners can deduct real estate taxes and mortgage interest on their federal income taxes but co-op owners cannot take these deductions.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

____ could be deducted on your Federal income taxes.

The price of the car you are leasing is called the

Most lenders do not want mortgage payments plus other debt payments to exceed ____ percent of your gross monthly income.

The highest average cost housing to purchase would be a

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

Balloon payment mortgages generally must be refinanced.

The difference between the market value of your home and the balance of the mortgage is your equity in the property.

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?

If you purchase a $110,000 and make a 10% down payment,how much would 1 point cost at closing?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Homeowners may be able to deduct from their taxable income [mortgage principal | mortgage interest]

____ is a reason for preferring to rent rather than to buy.

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 -If you drive a lot of miles each year rather than a few,the operating cost per mile will [increase | stay the same | decrease].

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

Terms of renting a housing unit may be contained in a contract called a

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?

One can increase the tax benefits of homeownership by selecting a shorter term mortgage,for example 15 years rather than 30 years.

In which of the following situations would you have to pay additional money when returning a vehicle using a closed-end lease?

Judy has $2,000 for a down payment on a vehicle and she can afford monthly payments of $400.She wants to finance a vehicle over no more than 4 years.If lenders are currently offering 6 percent interest on 5-year loans,what is the maximum price Judy can pay for a vehicle?

Condominium and Townhome owners can deduct real estate taxes and mortgage interest on their federal income taxes but co-op owners cannot take these deductions.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters