Exam 5: Making Automobile and Housing Decisions

Greg has negotiated a $20,000 price on a new pick-up 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?

The first step in the auto-buying process should be:

Graduated-payment mortgages and growing-equity mortgages are both examples of adjustable-rate mortgages.

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. -Longer term auto loans have a [lower rate but higher payment | higher rate but lower payment].

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

Homeowner's insurance will cost about _____ percent of the market value of the home.

If you made a down payment of $11,000 on a house worth $110,000,the lenders will require _____ as a result of the size of the down payment.

There are large regional differences in the prices of housing.

Dick and Jane (and their dog Spot)have just purchased a house and are calculating how much money they will need when the closing day rolls around.The purchase price is $200,000.They will make a 20% down payment,and they must pay 2 points on the loan.Closing costs should be 3% of the purchase price.What is the total dollar amount they will need at closing?

As home prices have fallen in recent year,the rent ratio:

To make a legally binding offer on a car,you must sign a sales contract that specifies the offering price and all the conditions of your offer.

The capital cost reduction on a vehicle lease is:

Kurt has $4,500 for a down payment and thinks he can afford monthly payments of $300.If Kurt can finance a vehicle with a 7%,4-year loan,what is the maximum amount he can afford to spend on the car?

An increase in the "rent ratio" indicates that renting is more affordable relative to housing prices.

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. -Homeowners may be able to deduct [mortgage principal | mortgage interest] from their taxable income.

The job of a mortgage banker is to locate conventional loans for clients.

Less rapid depreciation is one advantage of buying a new car rather than a used car.

A declining rent ratio indicates:

The monthly interest on your mortgage was $690; you paid $650.The result is:

Homeowners may be allowed to deduct _____ on their taxes.