Exam 8: The Home and Automobile Decision

You have been having significant problems with your new car.Every time you turn around something is breaking or not working properly.Fortunately,the "lemon laws" are there to help.Which of the following is not one of the criteria for application of the lemon laws?

Abraham is buying a new truck.The sale price for the truck is $23,410.His bank is loaning him the money at an APR of 6.5 for 5 years.How much will Abraham's monthly truck payment be?

Your friends just told you that they were denied a mortgage by their bank.The loan officer told them that they did not pass the 36 percent rule.They are confused and want you to explain what happened?

A title search fee is paid to an attorney or title company for searching ownership records to make sure the person selling you the property really owns it.

PITI is a one-time,initial cost of home ownership.

You have just obtained a mortgage to purchase your home.The ________ that you paid to obtain the loan are charges that must be paid at the time of the sale and serve to raise the effective cost of the loan.

According to Edmunds.com,a new car's value declines by 15 to 19 percent in the first minute of ownership after you leave the lot.

With a(n)________ mortgage,you make relatively small monthly payments for several years,after which the loan comes due and you must pay it off in one large payment.

Billy has chosen to purchase a new vehicle.The vehicle costs $15,000.His APR is 10% and he will be financing the vehicle for 36 months.How much will Billy pay each month for his new vehicle?

Bob and Marilyn Hartin know the bank will carefully evaluate their situation before lending them the money for the mortgage for their new home.Which is not a consideration?

As a general rule,your PITI shouldn't exceed 28% of your pretax monthly income.

Name the steps in smart buying.

Which should you consider when house hunting?

You are planning on starting your own business in 18 months and you intend to purchase a new home.You have looked carefully at your budget and have determined that you can afford a PITI of $900 per month.Your banker has told you that you can easily qualify for a PITI of $1,150 per month.Which of the following is the most reasonable explanation for this discrepancy?

They saw in the newspaper that they can get a fixed rate mortgage for 6.65% or a two-year ARM with an initial rate of 5.50%.Which is true about their mortgage choices?

The prepayment privilege allows the borrower to make early cash payments toward the principal balance on their loan.

If you have just been transferred to a new city and plan to live in your new location for many years,buying a house is generally a better option than leasing for the first year.

According to the 28 percent rule,Travis can afford a maximum PITI of $2,800.What is his gross monthly income?

Juanita has determined that the PITI on the house she would like to purchase will be $1,260 per month.What is the minimum gross salary she will need to qualify for a mortgage from a reputable lender?

A subprime mortgage is a mortgage with an APR below the prime rate.