Question 1

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

Accepted Answer

The answer of Billy and Suzie want to calculate the...

Question 2

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

Accepted Answer

A)  75% 
B)  80% 
C)  85% 
D)  90% 
E)  95%

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Most lenders do not want your monthly installment loan payments to exceed [36 | 50] percent of your monthly income.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

Accepted Answer

A) True 
 B)False

Question 7

The majority of each monthly payment at the beginning of the loan goes to pay

Accepted Answer

A)  principal. 
B)  interest. 
C)  real estate taxes. 
D)  homeowner's insurance. 
E)  private mortgage insurance.

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-You made an $800 mortgage payment.The interest on the mortgage for this month was $850.You have just experienced [negative | positive] amortization.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The 11th District Cost of Funds index is much [more | less] volatile than LIBOR and CD-based indexes.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 10

Townhome,condominium and co-op owners can deduct real estate taxes and mortgage interest on their federal income taxes.

Accepted Answer

A) True 
 B)False

Question 11

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?

Accepted Answer

A)  $12,528 
B)  $14,208 
C)  $16,028 
D)  $17,900 
E)  $18,028

Question 12

The first step in the auto-buying process should be

Accepted Answer

A)  test drive several cars. 
B)  begin negotiations. 
C)  consider alternative buying strategies. 
D)  decide whether to trade in your used car or to sell if yourself. 
E)  analyze how much car you can afford.

Question 13

When refinancing your mortgage,you should consider

Accepted Answer

A)  the interest rates of the old and new mortgages. 
B)  the years you expect to remain in the home. 
C)  any prepayment penalties on the old mortgage. 
D)  closing costs of the new mortgage. 
E)  all of these.

Question 14

The federal income tax advantage gained from home ownership will depend on the amount of deductible interest and property taxes and your total income.

Accepted Answer

A) True 
 B)False

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-If you qualify,you might be able to buy a home with no down payment with [an FHA | a VA] loan.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Paying mortgage points to get a lower rate of interest makes more sense if you expect to live in a home for a [longer | shorter] period of time.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 17

____ is a reason for owning your own home.

Accepted Answer

A)  Pride of ownership 
B)  A feeling of permanence 
C)  A sense of stability 
D)  A tax shelter 
E)  All of these are reasons.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The Real Estate Settlement Procedures Act governs [mortgage regulations | mortgage closings].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the

Question 19

In a condominium and townhome,the buyer receives title to an individual unit and joint ownership of the common areas.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  interest 
B)  principal 
C)  real estate taxes 
D)  homeowner's insurance 
E)  c and d only

Exam 5: Making Automobile and Housing Decisions

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Most lenders do not want your monthly installment loan payments to exceed [36 | 50] percent of your monthly income.

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

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

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

The majority of each monthly payment at the beginning of the loan goes to pay

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -You made an $800 mortgage payment.The interest on the mortgage for this month was $850.You have just experienced [negative | positive] amortization.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The 11^th District Cost of Funds index is much [more | less] volatile than LIBOR and CD-based indexes.

Townhome,condominium and co-op owners can deduct real estate taxes and mortgage interest on their federal income taxes.

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?

The first step in the auto-buying process should be

When refinancing your mortgage,you should consider

The federal income tax advantage gained from home ownership will depend on the amount of deductible interest and property taxes and your total income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you qualify,you might be able to buy a home with no down payment with [an FHA | a VA] loan.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Paying mortgage points to get a lower rate of interest makes more sense if you expect to live in a home for a [longer | shorter] period of time.

____ is a reason for owning your own home.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The Real Estate Settlement Procedures Act governs [mortgage regulations | mortgage closings].

In a condominium and townhome,the buyer receives title to an individual unit and joint ownership of the common areas.

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

Exam 5: Making Automobile and Housing Decisions

Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Most lenders do not want your monthly installment loan payments to exceed [36 | 50] percent of your monthly income.

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

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

The interest rate charged on adjustable-rate mortgages will change from time to time based on a specified index.

The majority of each monthly payment at the beginning of the loan goes to pay

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -You made an $800 mortgage payment.The interest on the mortgage for this month was $850.You have just experienced [negative | positive] amortization.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The 11th District Cost of Funds index is much [more | less] volatile than LIBOR and CD-based indexes.

Townhome,condominium and co-op owners can deduct real estate taxes and mortgage interest on their federal income taxes.

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?

The first step in the auto-buying process should be

When refinancing your mortgage,you should consider

The federal income tax advantage gained from home ownership will depend on the amount of deductible interest and property taxes and your total income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -If you qualify,you might be able to buy a home with no down payment with [an FHA | a VA] loan.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Paying mortgage points to get a lower rate of interest makes more sense if you expect to live in a home for a [longer | shorter] period of time.

____ is a reason for owning your own home.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The Real Estate Settlement Procedures Act governs [mortgage regulations | mortgage closings].

In a condominium and townhome,the buyer receives title to an individual unit and joint ownership of the common areas.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The 11^th District Cost of Funds index is much [more | less] volatile than LIBOR and CD-based indexes.