Exam 5: Making Automobile and Housing Decisions

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. -The choice of the index used with an ARM will make [much | little] difference in the volatility of your payment changes.

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. -For most homeowners,the most important financial reason for owning a home is for the [inflation hedge | tax shelter].

At the end of your car lease period,you intend to turn in the car,and you will not pay extra at that time based on the residual value of the car.You have ____ lease.

The sales contract on an automobile purchase contractually binds you to purchase the car at the price you offered in the contract.

Dick and Jane (and their dog Spot)have just purchased a house and are calculating how much money they will need when the closing day rolls around.The purchase price is $200,000.They will make a 20% down payment,and they must pay 2 points on the loan.Closing costs should be 3% of the purchase price.What is the total dollar amount they will need at closing? (Show all work.)

If a buyer withdraws from a transaction without a valid reason after signing a sales contract,he typically loses his earnest money.

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 made an $800 mortgage payment.The interest on the mortgage for this month was $850.You have just experienced [negative | positive] amortization.

The largest single investment you will undertake in your lifetime will probably be the purchase of an automobile.

If the maximum loan-to-value ratio that a lender will accept on a $100,000 loan is 80 percent,then the borrower must make a down payment of at least

____ is an ongoing cost of home ownership.

A real estate sales contract will include

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

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

At the end of the lease period,you may be required to

The financing rate on the car you are leasing is called the

The type of mortgage that will most likely need to be refinanced is the ____ mortgage.

When you receive title to an individual unit and joint ownership of any common areas and facilities,you have purchased a

Other factors being equal,fixed-rate mortgages will have higher interest rates initially than adjustable-rate mortgages.

The "rent ratio" has fallen as home prices have fallen.

Anna purchased a vehicle six years ago for $25,000.She recently sold it for $5,000.Over the years,she paid a total of $5,800 on auto insurance,$4,800 on gas and maintenance,and $2,500 in interest.What was her depreciation cost on this vehicle?