Question 1

A loan-to-value ratio of 80 percent would require a buyer to make a 20% down payment.

Accepted Answer

A) True 
 B)False

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Seeking mortgage preapproval [is | is not] recommended when you begin your house search.

Accepted Answer

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

Question 3

Most new car warranties cover a minimum of the first 36,000 miles or 3 years of ownership.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The average cost of owning is typically much less than leasing if you own the vehicle over [two | four] years.

Accepted Answer

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

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Shorter term auto loans offer the benefit of [lower payments | lower interest rate]

Accepted Answer

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

Question 8

Condominiums and townhomes are generally less costly than single-family,detached homes.

Accepted Answer

A) True 
 B)False

Question 9

Points paid when a home is refinanced can all be deducted as interest in the year they are paid.

Accepted Answer

A) True 
 B)False

Question 10

A money factor of 0.00280 on a lease is equivalent to an annual percentage rate of

Accepted Answer

A)  2.80. 
B)  3.60. 
C)  6.72. 
D)  8.64. 
E)  10.80.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-For most homeowners,the most important financial reason for owning a home is for the [inflation hedge | tax shelter].

Accepted Answer

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

Question 12

The ____ would be included in a rental contract or lease agreement.

Accepted Answer

A)  amount of the monthly payment 
B)  payment date 
C)  length of lease agreement 
D)  deposit required 
E)  all of these would be included

Question 13

Terminating a car lease before expiration is often difficult and costly.

Accepted Answer

A) True 
 B)False

Question 14

A significant legal difference between a cooperative and a condominium is that the condominium owner normally holds a title to the property.

Accepted Answer

A) True 
 B)False

Question 15

Negative amortization is possible with an adjustable-rate mortgage.

Accepted Answer

A) True 
 B)False

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Terminating a lease early is typically [difficult | easy].

Accepted Answer

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

Question 17

Sean and Lisa (age 25 and 28,respectively)are purchasing their first home for $200,000 with a 5% down payment.They will withdraw the down payment from Lisa's IRA.They will have to pay ____ on the IRA withdrawal.

Accepted Answer

A)  federal income taxes 
B)  an early withdrawal penalty 
C)  Social Security taxes 
D)  a and b 
E)  a,b,and c

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The total amount of interest you would have to pay would be less with a [25 | 20] year mortgage.

Accepted Answer

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

Exam 5: Making Automobile and Housing Decisions

A loan-to-value ratio of 80 percent would require a buyer to make a 20% down payment.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Seeking mortgage preapproval [is | is not] recommended when you begin your house search.

Most new car warranties cover a minimum of the first 36,000 miles or 3 years of ownership.

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

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The average cost of owning is typically much less than leasing if you own the vehicle over [two | four] years.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Shorter term auto loans offer the benefit of [lower payments | lower interest rate]

Condominiums and townhomes are generally less costly than single-family,detached homes.

Points paid when a home is refinanced can all be deducted as interest in the year they are paid.

A money factor of 0.00280 on a lease is equivalent to an annual percentage rate of

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -For most homeowners,the most important financial reason for owning a home is for the [inflation hedge | tax shelter].

The ____ would be included in a rental contract or lease agreement.

Terminating a car lease before expiration is often difficult and costly.

A significant legal difference between a cooperative and a condominium is that the condominium owner normally holds a title to the property.

Negative amortization is possible with an adjustable-rate mortgage.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Terminating a lease early is typically [difficult | easy].

Sean and Lisa (age 25 and 28,respectively) are purchasing their first home for $200,000 with a 5% down payment.They will withdraw the down payment from Lisa's IRA.They will have to pay ____ on the IRA withdrawal.

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

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The total amount of interest you would have to pay would be less with a [25 | 20] year mortgage.