Exam 5: Making Automobile and Housing Decisions

A Federal Housing Administration (FHA)loan is insured by the federal government.

The cost of a title search and title insurance are typically part of the closing costs on a housing transaction.

The Veterans Administration guarantees mortgage loans given to qualified veterans.

A PITI payment is composed of principal,interest,real estate taxes,and insurance.

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 lender gives you a choice of an 80% loan-to-value ratio or a 90% loan-to-value ratio.The interest rate for the 80% loan-to-value ratio loan will typically be [higher | lower] than the 90%.

Early termination clauses on an auto lease typically apply to cars that are stolen or totaled in an accident as well as when you just want to return the vehicle before the end of the lease.

A closed-end automobile lease is the most popular type of lease.

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

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

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].

_____ are the up-front,one-time costs of home ownership.

A short sale does not affect a distressed homeowner's credit score as much as a foreclosure.

A 5 percent down payment will result in larger monthly mortgage payments than a 10 percent down payment on the same house for the same maturity mortgage.

The term condominium refers to a style of architecture.

When you lease your apartment from the corporation that owns the building and your lease is an ownership share,your apartment is:

An escrow account is used to collect _____ from one's monthly mortgage payment.

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 purchase price of the house you are buying is $180,000.A loan-to-value ratio of 90% will produce a mortgage amount of [$162,000 | $180,000].

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. -Using a federal housing administration mortgage to finance your home would require a [lower | higher] down payment than a conventional 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. -A decrease in the "rent ratio" indicates that housing is relatively [more | less] affordable than renting.

The down payment is typically the only substantial housing cost that must be paid at the time of the purchase.