Exam 8: The Home and Automobile Decision

You disagree with Ed "Shifty" Smith,a car salesperson,on the price of an open-end lease.He says the depreciation charge is only $6,000.What is the actual depreciation charge for a car now worth $23,000 that is expected to drop in value to $15,000 in two years?

List three pros of an assumable loan.

You currently have an ARM that is charging you 7% with an index rate of 4%,a margin of 3%,and a periodic annual cap of 3.0%.Assume that rates have now increased by 2% during the last seven months.What rate will your ARM be adjusted to?

What are the common options for housing?

Leasing a car may make sense for some people but there are disadvantages to leasing.What are the disadvantages to leasing a car verses purchasing the car outright?

One of the main barriers to home ownership is the down payment.

According to the Keown book,how does a consumer avoid predatory lending?

A ________ is a middleman who,for a fee,secures mortgage loans for borrowers,but does not actually make those mortgage loans.

Over the past decade,the number of new car sales are down and the number of new car leases are up.What is probably the main reason why this is true?

Smart buying means enjoying the highest standard of living that you can based on your income and budget.

Subprime mortgages are illegal.

Which of the following housing alternatives puts the responsibility for maintenance and repairs on the occupant?

The first step at the car dealership is to negotiate the best price that you can on the car that you need.

The common areas in a condominium complex may include swimming pools,parking lots,and grounds.

Andrew and Jackie are considering taking out a $400,000 mortgage to buy a house.How much would they have to have for a down payment to not be required to buy PMI?

If you are the type of person who wants complete control over the style and decoration of your home,then a condominium or cooperative would be an appropriate housing decision for you.

Describe the keys to obtaining a "good" lease.

Tran currently makes $4,500 per month in gross income.He has a student loan payment of $250 per month and a car loan of $450 per month.His credit card payments average $300 per month.What is the largest PITI he could qualify for with a reputable lender?

What is not a benefit normally associated with home ownership?

Why should you set a goal to eventually be able to put at least 20% down on purchasing a home?