Exam 5: Making Automobile and Housing Decisions

Patrick would like to know the monthly payments and the total finance charges on the following two loan options: (Show all work.) a.$30,000, 9%, 36 months b.$30,000, 9%, 48 months

Jana has $1,500 for a down payment and thinks she can afford monthly payments of $300.If she can finance a vehicle with a 7%,4-year loan,what is the maximum loan amount Jana can afford?

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.

____ is a fixed auto ownership cost.

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 Real Estate Settlement Procedures Act [limits the amount of closing costs a lender can charge | requires advance disclosure of closing costs].

The money factor on an auto lease is similar to the interest rate on a loan.

The monthly payment will be lower on a 6-year auto loan than on a 3-year auto loan.

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. -Terminating a lease early is typically [difficult | easy].

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. -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].

Mike (age 40)is purchasing his second home for $200,000 with a 25% down payment.He will withdraw some of the down payment from his IRA.He will have to pay ____ on the IRA withdrawal.

A real estate sales contract will include

Phil and Christina are recently married and unsure of where they will be relocated after Christina finishes her residency in 9 months.Based on this information,which of the following housing recommendations would be most appropriate for them?

Greg has negotiated a $20,000 price on a new pickup truck.The manufacturer is offering a $1,500 rebate or 3.9%,three-year financing.Greg is also able to get 7%,three-year financing at his credit union.If Greg plans to finance $18,000 over three years,should he take the rebate or the 3.9% financing? (Show all work.)

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 are paying on a car loan,a furniture loan,and a student loan.This will have [an | no] effect on the lender's decision to grant you a mortgage loan.

According to federal law,private mortgage insurance on most loans ends automatically once the mortgage is paid down to 80% of the home's current market value.

Disadvantages of buying a used car rather than a new car include

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. -A real estate agent will typically be paid by the [buyer | seller] of the house.

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

A condominium buyer receives title to an individual unit and joint ownership of the common areas.

A money factor of 0.0028 on a lease is equivalent to an annual percentage rate of