Exam 5: Making Automobile and Housing Decisions

The greatest fixed cost involved with owning an automobile on loan is usually the auto insurance payments.

The loss of value in a car over time is called:

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 major variable cost of owning a car is [the loan payment | gasoline].

The _____ Act governs closings on owner-occupied houses,condominiums,and apartment buildings of four units or fewer.

A lender will generally require mortgage insurance if the down payment is less than 20 percent.

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?

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 a(n) [closed-end | open-end] lease,one owes more at the end of the lease if the car is worth less than its projected value at the end of the lease.

If a lender requires that mortgage payments cannot exceed 30% of gross income and total loan payments cannot exceed 38% of gross income,calculate the monthly payment for which a person with the following financial data could qualify.

Most lenders do not want mortgage payments to exceed _____ percent of your gross monthly income.

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

The Federal Housing Administration _____ high loan-to-value ratio mortgages.

The interest expense is lower on a 6-year auto loan than on a 3-year auto loan.

Anna purchased a vehicle six years ago for $25,000.She recently sold it for $5,000.Over the years,she paid a total of $5,800 on auto insurance,$4,800 on gas and maintenance,and $2,500 in interest.What was her depreciation cost on this vehicle?

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

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

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 convertible ARM will have a [higher | lower] interest rate than a traditional ARM.

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 biggest fixed cost of owning a car is [the loan payment | insurance].

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.

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 choice of the index used with an adjustable-rate mortgages will make [much | little] difference in the volatility of your payment changes.

A lender will usually require a loan-to-value ratio of _____ or less for you to avoid having to pay private mortgage insurance (PMI).