Exam 5: Making Automobile and Housing Decisions

You can deduct mortgage interest and property taxes on your home to reduce your federal income taxes only if you itemize deductions.

Commercial banks are an important source of both mortgage loans and interim construction loans.

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. -Using an FHA mortgage to finance your home would require a [lower | higher] down payment than a conventional loan.

____ could be deducted on your Federal income taxes.

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. -A decrease in the "rent ratio" indicates that housing is relatively [more | less] affordable than renting.

The market price of a house is $125,000 and the homebuyer will borrow $100,000.Two points will equal $2,500.

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. -With a [closed-end | open-end] lease,you turn in the car at the end of the term and have no additional financial obligation as a result of the residual value.

The down payment on the car you are leasing is called the

____ is a reason for owning your own home.

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. -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.

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. -It would make sense to purchase a vehicle at the end of a close-end lease period if the residual value in the lease agreement was [more | less] than the car's market value.

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. -Most lenders do not want your monthly installment loan payments to exceed [36 | 50] percent of your monthly income.

Most lenders do not want mortgage payments plus other debt payments to exceed ____ percent of your gross monthly income.

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. -[Lessor | Lessee] is another term for landlord.

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

In which of the following situations would you have to pay additional money when returning a vehicle using a closed-end lease?

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. -As home prices have fallen the "rent ratio" has [increased | decreased].

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

The FHA ____ high loan-to-value ratio 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. -There is direct ownership of your living space in a [condo | co-op apartment].