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. -You are paying on a car loan,a furniture loan,and a student loan.This will have [an | no] effect on the lender's decision to grant you a mortgage loan.

Negative amortization is possible with an adjustable-rate mortgage.

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. -When buying a home,the [emotional | financial] factors often carry the greatest weight.

The price of the car you are leasing is called the

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. -Homeowners may be able to deduct from their taxable income [mortgage principal | mortgage interest]

Balloon payment mortgages generally must be refinanced.

There are large regional differences in the price of housing.

Which of the following is not associated with buying a home with a lower-than-typical down payment?

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. -If your lender charges 1 1/2 mortgage points on a house selling for $100,000 on which there is to be a $90,000 loan,the points will cost you [$1,350 | $1,500].

The term condominium refers to a style of architecture.

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 purchase price of the house you are buying is $140,000.A loan-to-value ratio of 80% will require a down payment of [$34,000 | $28,000].

Private Mortgage Insurance (PMI)protects the lender from loss on a loan.

According to federal law,private mortgage insurance on most loans currently made ends automatically once the mortgage is paid down to 78% of the original value of the house.

A financial advantage of renting compared to purchasing housing is

The job of a mortgage banker is to locate conventional loans for clients.

Advantages of buying a used car rather than a new car include

One can increase the tax benefits of homeownership by selecting a shorter term mortgage,for example 15 years rather than 30 years.

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 earnest money deposit is a payment to the [real estate agent for his services | seller to show good faith when making an offer to buy].

Terms of renting a housing unit may be contained in a contract called a

Phil and Christina are recently married and are unsure of where they will be relocated after Christina finishes her residency in 9 months.Based on this information,which of the following housing recommendations would be most appropriate for them?