Question 1

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

Question 2

A declining rent ratio indicates

Accepted Answer

A)  lower housing prices relative to renting 
B)  lower rent relative to housing prices 
C)  higher housing prices relative to renting 
D)  none of the above 
A)  lower housing prices relative to renting 
B)  lower rent relative to housing prices 
C)  higher housing prices relative to renting 
D)  none of the above

Question 3

Earnest money is the sum of money the home buyer deposits with the

Accepted Answer

A)  realtor to view homes. 
B)  realtor for finding the desired home. 
C)  lender to originate the loan. 
D)  seller to indicate intent of purchase. 
E)  lender to guarantee the purchase. 
A)  realtor to view homes. 
B)  realtor for finding the desired home. 
C)  lender to originate the loan. 
D)  seller to indicate intent of purchase. 
E)  lender to guarantee the purchase.

Question 4

Earnest money deposits and contingency clauses are usually specified in the sale contract.

Accepted Answer

A) True 
 B)False

Question 5

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 a homeowner,you can deduct the mortgage interest and [property taxes | property insurance] if you itemize on your federal taxes.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 6

You should secure the trade in value of your current automobile before you start negotiating the final price on the car you are purchasing.

Accepted Answer

A) True 
 B)False

Question 7

The interest rates and monthly mortgage payments will not change over the life of your mortgage;you have a(n)

Accepted Answer

A)  reverse-annuity mortgage. 
B)  fixed-rate mortgage. 
C)  adjustable rate mortgage. 
D)  rollover mortgage. 
E)  graduated-payment mortgage. 
A)  reverse-annuity mortgage. 
B)  fixed-rate mortgage. 
C)  adjustable rate mortgage. 
D)  rollover mortgage. 
E)  graduated-payment mortgage.

Question 8

Variable auto ownership costs are most dependent on

Accepted Answer

A)  driver behavior. 
B)  mileage driven. 
C)  city lived in. 
D)  down payment. 
E)  hours driven. 
A)  driver behavior. 
B)  mileage driven. 
C)  city lived in. 
D)  down payment. 
E)  hours driven.

Question 9

Pete and Pam want to purchase a new home but don't know how much mortgage they can qualify for.The lender requires total installment loan payments not exceed 32% of gross monthly income.Based on Pete and Pam's financial data below,what is the maximum monthly mortgage payment for which they can qualify?

Accepted Answer

A)  $1,700 
B)  $1,600 
C)  $ 900 
D)  $ 600 
E)  $ 500 
A)  $1,700 
B)  $1,600 
C)  $ 900 
D)  $ 600 
E)  $ 500

Question 10

According to federal law,private mortgage insurance on most loans currently made ends automatically once the mortgage is paid down to 80% of the original value of the house.

Accepted Answer

A) True 
 B)False

Question 11

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

Accepted Answer

A)  $13,528 
B)  $14,400 
C)  $16,028 
D)  $17,028 
E)  $18,028 
A)  $13,528 
B)  $14,400 
C)  $16,028 
D)  $17,028 
E)  $18,028

Question 12

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

Accepted Answer

A) True 
 B)False

Question 13

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.
-You have a choice of a 25-year or 30-year mortgage.Your monthly payments will be [more | less] with the 30-year loan.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 14

Low-balling is a sales technique where the salesperson quotes a low price for a car to get you to make an offer,and negotiates the price upward prior to signing the sales agreement.

Accepted Answer

A) True 
 B)False

Question 15

One who leases an automobile is typically responsible for early termination costs,even when early termination is due to theft or auto accidents.

Accepted Answer

A) True 
 B)False

Question 16

The monthly interest on your mortgage was $690;you paid $650.The result is

Accepted Answer

A)  growing equity. 
B)  negative amortization. 
C)  fixed interest expense. 
D)  shrinking principal. 
E)  indexed equity. 
A)  growing equity. 
B)  negative amortization. 
C)  fixed interest expense. 
D)  shrinking principal. 
E)  indexed equity.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

Accepted Answer

A) True 
 B)False

Question 19

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 20

The first choice in housing in the United States is

Accepted Answer

A)  single-family home. 
B)  condominium. 
C)  cooperative apartment. 
D)  manufactured home. 
E)  rental apartment. 
A)  single-family home. 
B)  condominium. 
C)  cooperative apartment. 
D)  manufactured home. 
E)  rental apartment.

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

A declining rent ratio indicates

Earnest money is the sum of money the home buyer deposits with the

Earnest money deposits and contingency clauses are usually specified in the sale contract.

You should secure the trade in value of your current automobile before you start negotiating the final price on the car you are purchasing.

The interest rates and monthly mortgage payments will not change over the life of your mortgage;you have a(n)

Variable auto ownership costs are most dependent on

According to federal law,private mortgage insurance on most loans currently made ends automatically once the mortgage is paid down to 80% of the original value of the house.

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

Low-balling is a sales technique where the salesperson quotes a low price for a car to get you to make an offer,and negotiates the price upward prior to signing the sales agreement.

One who leases an automobile is typically responsible for early termination costs,even when early termination is due to theft or auto accidents.

The monthly interest on your mortgage was $690;you paid $650.The result is

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

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

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

The first choice in housing in the United States is

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 5: Making Automobile and Housing Decisions

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

A declining rent ratio indicates

Earnest money is the sum of money the home buyer deposits with the

Earnest money deposits and contingency clauses are usually specified in the sale contract.

You should secure the trade in value of your current automobile before you start negotiating the final price on the car you are purchasing.

The interest rates and monthly mortgage payments will not change over the life of your mortgage;you have a(n)

Variable auto ownership costs are most dependent on

According to federal law,private mortgage insurance on most loans currently made ends automatically once the mortgage is paid down to 80% of the original value of the house.

Kurt has $4,500 for a down payment and thinks she can afford monthly payments of $300.If he can finance a vehicle with a 7%,4-year loan,what is the maximum amount Kurt can afford to spend on the car?

You will need to purchase homeowners insurance equal to the purchase price of the house you are buying.

Low-balling is a sales technique where the salesperson quotes a low price for a car to get you to make an offer,and negotiates the price upward prior to signing the sales agreement.

One who leases an automobile is typically responsible for early termination costs,even when early termination is due to theft or auto accidents.

The monthly interest on your mortgage was $690;you paid $650.The result is

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

Adjustable-rate mortgages with interest rate caps can lead to negative amortization.

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

The first choice in housing in the United States is

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters